“Improving macro conditions, but technical damage and positioning still point to a fragile structure.”
Following a sharp drawdown, Bitcoin has now reached a key downside target. From a macroeconomic perspective, strengthening U.S. growth indicators, renewed fiscal impulse, and a gradually weakening U.S. dollar would normally support risk assets. However, in practice, Bitcoin has failed to confirm a durable technical reversal, leaving the market caught between improving macro conditions and unresolved technical damage.
Changes in technical structure are particularly important. Key trend levels that historically separate tactical rebounds from structural bear markets have already been breached, and prior support zones have transitioned into resistance. In the absence of a compelling new narrative or catalyst, recent rebounds should be viewed as corrective in nature following the decline, rather than signaling a change in trend or regime.
Key trend levels breached: rebounds remain corrective
From a technical standpoint, Bitcoin continues to trade below its 21-week moving average. Until prices climb back above and hold this level, any near-term rebound should not be interpreted as confirmation of a trend reversal. Historically, when both medium- and long-term moving-average support structures are broken, markets are more prone to extended periods of weakness.
The current price structure also shares notable similarities with the prior cycle. After forming a late-cycle peak, Bitcoin experienced a brief period of sideways consolidation that ultimately failed, followed by another leg lower. In terms of market rhythm, even when macro conditions improve, prices do not necessarily stabilize immediately, often undergoing further pullbacks or weak consolidation with a downward shift in the trading range.
Crowded positioning: ETF flows risk becoming an overhang
Positioning dynamics add another layer of risk. As Bitcoin entered its sharp decline, ETF holdings failed to adjust meaningfully alongside falling prices. Since early 2025, Bitcoin ETFs have accumulated approximately $20 billion in inflows, even as price trends weakened materially.
Since the launch of U.S. spot Bitcoin ETFs in January 2024, investors have purchased approximately $54.3 billion of Bitcoin through ETFs at an estimated average acquisition price of around $90,000 per BTC. At current price levels, this translates into unrealized losses on the order of $10 billion. When a large share of capital is sitting on unrealized losses, incremental buying becomes increasingly difficult without a fresh narrative or catalyst. As a result, these holdings are more likely to turn into overhead supply during rebounds rather than providing effective support.
Taken together, while improving macro conditions provide a potentially supportive backdrop for risk assets, unresolved technical damage, crowded positioning, and weakening participation suggest that macro tailwinds are unlikely to translate into sustained upside momentum in the near term. Bitcoin currently appears closer to a late-cycle peak region, where selling pressure during rebounds can continue to outweigh new demand.
Until a clear improvement in technical reversal signals emerges, positioning should remain cautious. Any tactical buying attempts should be accompanied by tight stop-loss levels and strict risk discipline. Based on the current structure, the $73,000 level is unlikely to mark the ultimate low of this Bitcoin cycle.
Select views above are drawn from Matrix on Target. Contact us to access the full Matrix on Target report.
Disclaimer: The above content is for informational purposes and reference only. The content does not constitute investment advice. Digital asset transactions can be precarious and volatile. Investment decisions should be made after carefully considering individual circumstances and consulting financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
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