Bitcoin (BTC) has dropped below key support levels and swept the February lows, placing traders on alert for the next major move. Sellers remain in control as BTC closed below its 200-week simple moving average. Analysts are monitoring extreme bearish positioning that could trigger a sharp rebound, according to market observers including analyst SuperBitcoinBro and analyst Kaz.
Bitcoin Closes Below 200-Week Moving Average Near Long-Term Trendline
Bitcoin is approaching a major technical decision point after closing just below its 200-week simple moving average (SMA), according to analyst SuperBitcoinBro. The chart shows BTC still holding above a long-term rising trendline that connects the 2022 and 2023 cycle lows.
The analysis compares the current structure to the market bottom that formed after the FTX collapse in late 2022. In both cases, BTC broke out of a prolonged downtrend and later returned to retest the breakout area before attempting a larger recovery.
The 200-week SMA remains one of the most closely watched long-term indicators on the chart. While BTC closed slightly below this level, it continues to trade near the intersection of the moving average and the multi-year ascending trendline. This area represents a significant support zone.
The chart also highlights a long-term downtrend line that was previously broken during the bull market advance. According to the analysis, Bitcoin is now retesting that former resistance as potential support, a pattern often monitored for confirmation of larger trend changes.
The Relative Strength Index (RSI) shows a developing bullish divergence. While price recently moved lower, the RSI formed higher lows, indicating weakening downside momentum compared with previous declines.
Bitcoin Breaks Below $60,000 as Positioning Data Shows Extreme Selling
Bitcoin has broken below the $60,000 level and swept the February lows, extending a correction that has seen multiple support zones fail. According to analyst Kaz, sellers remain in control for now, but positioning data suggests conditions may be developing for a sharp relief rally.
The chart shows BTC losing support near $63,000 before falling through the $60,000 area. What initially appeared to be a stabilization range failed to hold, resulting in another wave of downside pressure.
Market positioning data also weakened during the decline. Aggregated Open Interest trended lower, indicating traders closed positions as price moved down. Perpetual futures cumulative volume delta (Perps CVD) continued to deteriorate, showing aggressive selling activity in the derivatives market.
Spot market activity also remained under pressure. Spot CVD reached extreme negative readings, although the chart suggests selling has started to flatten rather than accelerate further. Liquidation data shows another significant long-position flush, forcing out traders who remained positioned for a rebound after previous declines.
Analysts Identify Potential Short Squeeze Conditions Above $62,000
According to analyst Kaz, extreme positioning often creates conditions for powerful reversals. The analysis states that a successful reclaim of the $62,000 area could trap newly opened short positions and trigger a move toward the next major resistance zone around $68,200.
The combination of heavy long liquidations, extreme futures positioning, and deeply negative spot flows suggests the market may be approaching conditions where a relief bounce becomes increasingly likely, according to the analysis. For now, the data continues to favor sellers.
FAQ
What technical level did Bitcoin close below recently?
Bitcoin closed just below its 200-week simple moving average (SMA), according to analyst SuperBitcoinBro. The chart shows BTC still holding above a long-term rising trendline that connects the 2022 and 2023 cycle lows.
What positioning data indicates extreme selling pressure in Bitcoin?
Aggregated Open Interest trended lower as traders closed positions during the price decline. Perpetual futures cumulative volume delta (Perps CVD) continued to deteriorate, showing aggressive selling activity in the derivatives market. Spot CVD reached extreme negative readings, and liquidation data shows another significant long-position flush.
What price level could trigger a short squeeze in Bitcoin?
According to analyst Kaz, a successful reclaim of the $62,000 area could trap newly opened short positions and trigger a move toward the next major resistance zone around $68,200.
