Matrixport Research: Bitcoin Breaks Below Key Support, Rebound May Be Just a "Breather" Rather Than a Reversal
- Core View: Despite marginal improvements in the macro environment, Bitcoin's recent rebound should be viewed more as a corrective recovery after a decline rather than a trend reversal, as key technical levels have been breached and ETF holders are generally at unrealized losses, creating potential selling pressure. The market remains in a weak consolidation phase.
- Key Factors:
- Key Technical Levels Breached: Bitcoin has broken below and lost the important trend level that distinguishes a rebound from a downtrend. The previous support zone has turned into resistance, and the price continues to trade below the 21-week moving average.
- Crowded ETF Holdings Structure: Since the launch of ETFs, investors have cumulatively purchased approximately $54.3 billion worth of Bitcoin, with an average cost around $90,000. At current prices, unrealized losses amount to tens of billions of dollars, which can easily create selling pressure during rebounds.
- Divergence Between Macro and Market Performance: Macro positives such as the rebound in US growth indicators have not effectively translated into sustained upward momentum for Bitcoin. The price is still caught between "macro improvement" and "insufficient technical repair."
- Similar Historical Cycle Rhythm: The current price structure resembles the pattern following the peak of the previous cycle. After experiencing sideways movement, it is prone to entering another phase of decline or weak consolidation, with the price center potentially shifting lower.
- Cautious Strategic Judgment: Restraint should be maintained until the trend clearly reverses. $73,000 is unlikely to be the final bottom of this cycle.
After experiencing a rapid pullback, the Bitcoin price has fallen to a key downside target range. From a macro perspective, the rebound in US growth indicators, stronger fiscal stimulus, and a moderate weakening of the US dollar should, in theory, provide support for risk assets. However, judging by the actual market performance, Bitcoin has yet to provide a clear and sustainable reversal confirmation signal. The market remains caught in a tug-of-war between "macro improvement" and "insufficient technical repair."
The change in technical structure is particularly critical. The important trend level previously used to distinguish between a "phased rebound" and a "structural downtrend" has been breached and lost. The previous support zone has consequently transformed into overhead resistance. In the absence of a compelling new narrative or a clear catalyst, the recent recovery should be viewed more as a corrective rebound following a decline, rather than a shift in trend or structure.
Key Trend Level Lost: Rebound Remains Corrective Recovery
From a technical standpoint, Bitcoin continues to trade below its 21-week moving average. Until this moving average is reclaimed and held, short-term rebounds are difficult to be considered as confirmation signals for a trend reversal. Historical experience shows that when both medium-term and long-term moving average support structures are broken, the market is more prone to enter a prolonged phase of weakness.
The current price structure shares similarities with the previous cycle: after forming a phased high, it experienced a brief consolidation but failed to sustain it, subsequently entering the next leg down. In terms of rhythm, even with improving macro conditions, prices may not bottom immediately and often undergo further declines or weak consolidation, with the price center shifting lower.
Crowded Positioning Structure: ETF Flows More Likely to Transform into Overhead Pressure
Constraints from the capital structure cannot be ignored either. After Bitcoin entered a sharp decline phase, ETF holdings did not decrease significantly alongside the price. Since the beginning of 2025, ETFs have seen cumulative net inflows of approximately $20 billion, even as the price trend has significantly weakened during the same period.
It is estimated that since the launch of US spot Bitcoin ETFs, investors have cumulatively purchased about $54.3 billion worth of Bitcoin through the ETF channel, with an average purchase cost of around $90,000 per coin. At the current price level, the corresponding unrealized loss has reached tens of billions of dollars. When a large amount of capital is in an unrealized loss position, lacking a new narrative or incremental buying to take over, this existing capital is more likely to act as overhead supply during a rebound rather than forming effective support.
In summary, although marginal improvements in the macro environment provide some external conditions for risk assets, against the backdrop of an unrepaired technical structure, crowded positioning, and weakening participation, macro positives are unlikely to translate into sustained upward momentum in the short term. Bitcoin currently appears more like it is in the topping area of the later stage of a cycle, where selling pressure during rebounds may still outweigh absorption by new capital.
Until the trend is clearly reversed, strategic restraint should be maintained. If attempting tactical participation, it must be premised on stricter stop-loss and position discipline. Judging solely from the current structure, $73,000 is unlikely to be the final bottom of this Bitcoin cycle.
The views above are partly sourced from Matrix on Target. Contact us to obtain the full Matrix on Target report.
Disclaimer: The market carries risks, and investment requires caution. This article does not constitute investment advice. Digital asset trading can carry significant risk and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
