Bitcoin Tests Critical $68K Trendline as Bulls Target $80K Liquidity Grab

Bitcoin Faces Make-or-Break Moment at Historic Support Level

Bitcoin's recent push toward $70,000 has reached a critical juncture, with the cryptocurrency now testing a technical level that has historically determined the difference between continued recovery and deeper correction. As institutional money begins flowing back into spot ETFs after weeks of sustained outflows, traders are watching whether bulls can reclaim key support levels that would open the door to a potential liquidity-driven rally toward $80,000.

The confluence of resumed institutional accumulation, significant short liquidation clusters, and historically significant moving averages has created a technical setup that could define Bitcoin's trajectory for the coming weeks. Yet analysts remain cautious, noting that by historical standards, declaring the end of the current bear market may be premature.

The Facts

Bitcoin briefly touched $70,000 during Wednesday's trading session before retreating to the $68,000 level, where it faces resistance from the 200-week exponential moving average (EMA), currently positioned at $68,338 ^[1]. Analyst Rekt Capital identified this trendline as a critical threshold, warning that "the moment of truth is coming for Bitcoin" and that the price "will need a Weekly Close back above the EMA and flip it into new support to go against the grain of history" ^[1].

The attempted recovery ultimately lost momentum, with Bitcoin falling back below $68,000 on Thursday as the 200-week EMA began "acting as resistance" ^[3]. According to Rekt Capital, "as long as Bitcoin remains below the 200-week EMA, history suggests price will favour additional downside" ^[3]. The cryptocurrency is currently testing both this moving average and the 2021 all-time high level around $69,000, creating a crucial resistance zone ^[6].

Institutional demand has shown renewed signs of life after an extended period of capital flight. US-based spot Bitcoin ETFs recorded their largest inflows since early February, with $507 million flowing into these products on Wednesday alone ^[1]. This followed Tuesday's inflows of $258 million, ending a five-week outflow streak that had seen a cumulative $3.8 billion exit these investment vehicles ^[2]. Major players led the turnaround, with Fidelity recording approximately $83 million in inflows and BlackRock's iShares Bitcoin Trust attracting around $79 million ^[2].

The price action also triggered significant liquidations in the derivatives market. Wednesday's rally to $70,000 resulted in nearly $200 million in short liquidations as bearish traders were forced to close positions ^[6]. Monitoring data from CoinGlass reveals substantial liquidity clusters ahead, with approximately $2 billion in ask orders sitting between $72,450 and $75,000 ^[1]. If bulls can push through the $75,000 level, it could trigger a "liquidation squeeze" that forces additional short covering, potentially driving prices toward the next major cluster at $80,000 ^[1].

However, on-chain analysis reveals a more complex picture. The realized price for Bitcoin holders who purchased between six months and two years ago stands at $74,500, with this cohort's MVRV ratio (market value to realized value) currently at 0.88—indicating they are, on average, holding at a loss ^[4]. According to analyst Anıl, Bitcoin tested and reclaimed the $64,200 level representing the average cost basis for coins aged 18-24 months ^[4], but remains well below the break-even point for the broader six-month-to-two-year holder group.

The broader market context also contributed to Bitcoin's bounce. Positive corporate earnings, particularly from chip giant Nvidia, which reported quarterly revenue of $68.1 billion, improved risk sentiment across both equity and crypto markets ^[2]. Alternative cryptocurrencies including Ethereum, Solana, Cardano, and Dogecoin posted double-digit gains alongside Bitcoin's recovery ^[2].

Despite the relief rally, traders remain highly cautious. Analyst Jelle noted that "yesterday's $BTC rally pushed price straight into the previous cycle highs & the 12h trend, and then rejected. The trend remains clear - be cautious & take it slow" ^[3]. Trader Roman emphasized that "every bear cycle has dropped nearly 80% from its peak," compared to Bitcoin's current maximum drawdown of approximately 53% from its October 2025 all-time high of $126,200 ^[3].

Analysis & Context

The current technical setup represents a classic inflection point where multiple timeframes and market participants converge around critical price levels. The 200-week EMA has historically served as a reliable indicator of long-term trend direction—acting as support during bull markets and resistance during bear phases. Bitcoin's current inability to sustainably reclaim this level suggests the market structure remains fragile despite the recent bounce.

The resumption of ETF inflows after five consecutive weeks of outflows signals a potential shift in institutional sentiment, but the magnitude matters. While $765 million in two-day inflows represents improvement, it pales in comparison to the $3.8 billion that exited during the preceding drawdown. The 90-day rolling average of ETF flows remains deeply negative at -$2.18 billion ^[5], indicating that sustained institutional re-accumulation has not yet materialized. Historically, Bitcoin's strongest rallies have coincided with persistent positive ETF flows, not isolated days of inflows amid a broader negative trend.

The liquidity structure above current prices creates an intriguing technical scenario. The clustering of $2 billion in sell orders between $72,450 and $75,000, followed by the $80,000 level, suggests that if bulls can generate sufficient momentum to breach these zones, the resulting short covering could accelerate price appreciation. This mirrors patterns seen in previous recoveries where liquidity grabs above resistance levels triggered cascading short liquidations.

However, the on-chain data provides important context about potential supply overhangs. With holders who purchased between six months and two years ago underwater at current prices, any rally toward their $74,500 break-even point could encounter increased selling pressure as this cohort seeks to exit losing positions. A decisive move above $74,500 would place these holders back into profit and potentially reduce distribution pressure, making this level a critical psychological and technical threshold beyond the immediate $68,000-$70,000 zone.

The cautious stance adopted by experienced traders reflects an understanding of typical bear market duration and depth. At roughly 140 days into the current correction, Bitcoin's bear market remains young by historical standards, with the shortest previous bear cycle lasting 365 days ^[3]. The 53% drawdown from all-time highs, while painful, falls short of the 80% declines characteristic of previous bear markets. This suggests that even if the immediate technical picture improves, the macro trend may require more time and deeper price discovery before a sustainable bull market can emerge.

The correlation with traditional risk assets, particularly the Nasdaq index, adds another layer of complexity. Bitcoin's 80%+ correlation with US technology stocks ^[6] means that any sustained recovery likely requires continued stability or improvement in equity markets—a factor largely outside the control of Bitcoin-specific fundamentals.

Key Takeaways

• Bitcoin must reclaim and hold the 200-week EMA at $68,338 on a weekly close basis to invalidate bearish historical patterns and confirm recovery momentum.

• Institutional flows have turned positive after five weeks of outflows, but the 90-day average remains deeply negative, indicating the return of sustained institutional demand has not yet been confirmed.

• Significant liquidity clusters between $72,000-$75,000 and at $80,000 create potential for accelerated moves higher if bulls can generate sufficient momentum to trigger cascading short liquidations.

• The $74,500 level represents the break-even point for holders who purchased between six months and two years ago and could act as a critical supply overhang or confirmation level depending on how price interacts with this zone.

• By historical bear market standards—both in duration and depth—the current correction remains young, suggesting caution is warranted even if short-term technical indicators improve.