Bitcoin Drops to $68K Amid Four-Week Slide, but Bullish Divergence Hints at $71K Test

Bitcoin’s (BTC) latest attempt to stabilize has left traders divided. After briefly reclaiming the $70,000 level over the weekend, the asset slipped back toward $68,000, extending a four-week losing streak that has weighed on broader crypto markets.

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While macro uncertainty and technical resistance continue to cap upside momentum, emerging indicators suggest the market may be preparing for a short-term recovery.

The decline comes after weeks of sustained selling pressure that followed Bitcoin’s earlier rally toward record highs. Market sentiment has weakened alongside concerns over interest rates and reduced inflows into speculative assets, pushing the asset into a corrective phase rather than a confirmed reversal.

Bitcoin (BTC) Market Structure Remains Fragile Below $75K

Technical analysis shows Bitcoin is still trading within a descending channel on higher timeframes, keeping the broader trend cautious. The breakdown below $75,000 earlier accelerated losses toward the $60,000 demand zone, where buyers re-entered the market, triggering the current rebound.

Price action is now compressing between $68,000 and $72,000, an area viewed as key resistance. Analysts note that a sustained move above $72,000 could open the path toward $75,000, while repeated rejection may send Bitcoin back toward $65,000 or even retest the $60,000 support region.

Momentum indicators also reflect this uncertainty. Bitcoin remains below its 50-day moving average, confirming that the short-term trend has not yet shifted bullish despite the recent bounce.

Bullish Divergence and Liquidations Offer Mixed Signals

Despite the downtrend, technical momentum is showing early signs of improvement. The RSI has formed a bullish divergence, meaning momentum is strengthening even as price recently printed lower lows, a pattern often associated with relief rallies.

Similarly, more than $75 million in Bitcoin futures positions were liquidated during recent volatility. Such liquidations can reset market positioning and sometimes precede stronger directional moves. Analysts are now watching the $71,000 resistance closely as the next test for bullish momentum.

On-chain sentiment adds another layer to the outlook. Larger orders appeared near the $60,000–$65,000 range, suggesting accumulation by larger market participants during the sell-off, while recent upward moves appear to be driven more by retail traders.

Macro Events and Seasonal Factors in Focus

Seasonal narratives are also attracting attention as markets approach the Chinese New Year, which has historically coincided with mixed performance in crypto markets. Some traders expect short-term liquidity shifts, though analysts caution that global participation has reduced the impact of regional events over time.

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Meanwhile, corporate conviction remains visible. Strategy chairman Michael Saylor recently stated the firm could withstand an extreme Bitcoin decline to $8,000 while continuing to hold and accumulate the asset, underscoring a long-term outlook despite current volatility.

Cover image from ChatGPT, BTCUSUD chart from Tradingview