Matrixport Research: Bitcoin breaches key support levels; rebound may be just a "pause" rather than a reversal

After experiencing a rapid retracement, Bitcoin’s price has dipped into a key downside target zone. From a macro perspective, indicators of US growth are rebounding, fiscal policy is strengthening, and the US dollar is mildly weakening, which should theoretically support risk assets; however, in practice, Bitcoin has yet to show clear, sustainable reversal signals. The market remains caught between “macro improvement” and “insufficient technical repair.”

Changes in technical structure are particularly critical. The important trend levels used to distinguish between “short-term rebound” and “structural decline” have been broken and lost. Previous support zones have turned into resistance above. Without convincing new narratives or clear catalysts, recent recoveries should be viewed more as corrective rebounds after a decline rather than a shift in trend or structure.

Key trend levels lost: Rebound remains a corrective rally

From a technical standpoint, Bitcoin continues to trade below the 21-week moving average. Until it recovers and stabilizes above this moving average, short-term rebounds cannot be considered confirmation of a trend reversal. Historical experience shows that when both medium- and long-term support levels are broken, the market tends to enter a prolonged period of weakness.

The current price structure resembles that of the previous cycle: after forming a local high, it experienced a brief sideways correction but failed to continue upward, then entered the next downtrend. Even if macro conditions improve, prices may not immediately stop falling; they often undergo a period of decline or weak consolidation, with the center of gravity shifting further downward.

Positioning is overly crowded: ETF capital is more likely to become resistance above

Constraints at the capital structure level should not be overlooked. After Bitcoin entered a sharp decline, ETF holdings did not significantly decrease with the price. Since early 2025, ETF net inflows have totaled about $20 billion, even as the price trend weakened markedly.

Estimates suggest that since the launch of the US spot Bitcoin ETF, investors have accumulated approximately $54.3 billion worth of Bitcoin through ETF channels, with an average purchase cost of around $90,000 per Bitcoin. At current price levels, the unrealized loss has reached hundreds of millions of dollars. When a large amount of capital is in floating loss, without new narratives or incremental buying, this existing position is more likely to turn into supply during rebounds rather than provide effective support.

Overall, although marginal macro improvements provide some external conditions for risk assets, the lack of structural repair, crowded positions, and weakening participation make it difficult for macro positives to translate into sustained upward momentum in the short term. Bitcoin currently appears to be in the late cycle, near the top area, where selling pressure during rebounds could outweigh the absorption of new funds.

Until the trend is clearly reversed, a cautious approach remains advisable. Tactical participation should be based on stricter stop-loss and position discipline. Judging from the current structure, $73,000 is unlikely to be the final bottom of this Bitcoin cycle.

_The above views are from Matrix on Target, _and contact usto obtain the full Matrix on Target report.

Disclaimer: The market carries risks; investment should be cautious. This article does not constitute investment advice. Trading digital assets involves significant risks 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 this information.