Bitcoin Sell-off Capped At $70K But Data Points To Rebound

Bitcoin (BTC) dropped below $69,000 on Thursday, pulling the price back into its six-week range just days after tapping range highs above $76,000.

The pullback coincides with increased selling in Bitcoin futures markets and stalled demand from US-based investors, but the chance of a rebound rally remains. A recurring chart pattern suggests that BTC could resume its bullish trend if the necessary conditions are met.

Bitcoin futures set the trend as spot demand fades

The latest pullback aligns with a visible shift in derivatives’ dominance over spot activity. The Coinbase premium gap turned negative after a period of steady demand, suggesting weak follow-through among US-based investors.

Meanwhile, crypto analyst IT Tech noted a clear imbalance between the spot and perpetual futures. The cumulative volume delta (CVD), which tracks net buying versus selling across markets, fell by $40.64 million in the spot CVD, while the perpetual CVD fell by $506.75 million, highlighting stronger selling pressure from leveraged traders.

However, the funding rates have flipped positive to 0.05%, meaning long positions are now paying shorts, indicating a long bias across the derivatives markets.

The order book data shows bid-side support holding near $70,000, with both spot and perpetual markets leaning toward buyers.

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Fractal setup mirrors early-March bounce

On the lower time frames, Bitcoin is forming a similar fractal setup to the March 6 through March 8 correction when the price declined and swept internal liquidity levels before reversing higher on the charts. 

The current move follows the same sequence, with successive lower lows developing into a potential exhaustion phase for the price.

In the prior breakout, the reversal aligned with a bullish divergence on the relative strength index (RSI), where RSI held equal lows while price printed a lower low. The pattern signaled a fading momentum from sellers. A comparable divergence is now developing, reinforcing the bullish fractal structure.

The liquidation data also supports this setup. Significant long-side liquidations have been observed on both occasions, reducing the open interest and flushing out overleveraged positions. 

A swift reclaim of $70,000 aligns with the previous fractal recovery path, opening a move toward $76,000. The $72,000 level acts as the key pivot, where a reclaim may trigger a short squeeze if short positions get trapped.

However, the setup remains time-sensitive. A breakdown below $68,300 shifts focus toward the $65,000 and $62,000 levels, where higher-time-frame liquidity sits for BTC.

Trading Stables founder Ryan Scott flagged $73,000 as a key base level, noting that a failure to stabilize above this level signals a weak buyer response, raising the chance of a drop toward range lows near $62,000.

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