Bitcoin is testing a historic floor zone tied to previous parabolic rallies.
Bitcoin briefly climbed past $71,000 early Friday, as it slightly bounced back from earlier weakness. This comes as authorities worked to address oil supply disruptions in the Strait of Hormuz and restore market stability.
Amid these developments, Bitcoin is nearing a long-standing support trendline that has “guarded” its price action since 2017.
Support Floor
According to data shared by crypto analyst Ali Martinez, historically, each prior retest of this level preceded major rallies, including gains of 963% in 2017, 261% in 2018, 1,126% following the 2020 COVID-19 market crash, and 660% after the 2022 FTX collapse.
The flagship cryptocurrency is currently approaching this support zone between $60,000 and $56,000. Martinez added,
“If this floor holds, we aren’t just looking at a bounce. Indeed, we are looking at the potential launchpad for the next major bull cycle.”
Additionally, the TD Sequential flashed a buy signal on Bitcoin, which means that the recent downtrend may be losing momentum. Based on this setup, the asset may be positioned for a rebound from its current levels.
Separate data shows Bitcoin is exhibiting a significant divergence as the number of whale wallets holding at least 100 BTC has increased to 753 over the past three months. During the same period, Bitcoin’s market value declined by 20%, indicating accumulation by large holders despite falling prices.
Weak Conviction
But a deeper look at market structure reveals that the latest move is not yet backed by strong conviction across all segments. Bitcoin has cleared a major supply cluster, which pushed the asset into a relatively thin liquidity zone up to $82,000. This suggests reduced resistance in the short term. However, the breakout has yet to confirm a broader structural shift.
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Around 60% of Bitcoin’s supply is currently in profit, below the typical 75% seen in stronger bull phases, while short-term holders are realizing profits at a pace of $18.4 million per hour, pointing to ongoing sell-side pressure. Although spot demand has improved, supported by renewed inflows into US spot Bitcoin ETFs and stronger exchange buying activity, derivatives data show limited conviction.
CME futures open interest remains low, and negative funding rates indicate continued short positioning, which has partly fueled the rally through short covering. Options markets reflect declining volatility and rising call interest, pointing to a more balanced outlook. Glassnode observed that holding above $70,000 while absorbing profit-taking could support a move toward $78,000 and potentially $82,000, though further upside will likely depend on stronger capital inflows and increased leverage.
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