Key Takeaways
- BTC declined 3.1% to approximately $70,182 in Friday’s Asian session
- Thursday saw Bitcoin momentarily reach a one-month peak at $74,000 before pulling back
- CryptoQuant’s Bull Score Index registers only 10 out of 100, indicating bear market conditions
- The rejection at $74,000 resistance has analysts focusing on $60,000 as critical support
- Increased demand from US investors conflicts with broader macroeconomic headwinds
Bitcoin experienced a significant retreat on Friday following a brief rally to $74,000 during Thursday’s session, settling around $70,182 in Asian markets.
The cryptocurrency declined approximately 3.1% after reaching its highest level in a month on Coinbase Thursday, momentarily testing the 50-day exponential moving average before encountering significant resistance.
Despite Friday’s decline, BTC is still positioned for approximately 7% gains over the weekly timeframe.
Escalating geopolitical tensions contributed to market volatility. Coordinated strikes by the US and Israel on Iranian targets prompted retaliatory responses involving missiles and drones, with hostilities now extending into their seventh consecutive day.
The ongoing conflict has heightened concerns regarding potential disruptions to oil shipments through the Strait of Hormuz, a critical chokepoint accounting for roughly 20% of worldwide oil transit. Crude prices surged over 16% during the week.
The spike in energy costs has reignited inflation worries, dampening prospects for Federal Reserve rate reductions. This dynamic bolstered the US dollar’s value, creating headwinds for risk-oriented assets like Bitcoin.
On-Chain Indicators Signal Continued Weakness
Blockchain analytics provider CryptoQuant stated Thursday that Bitcoin continues to exhibit bear market characteristics, notwithstanding the recent upward price movement.
Their proprietary Bull Score Index, which synthesizes both fundamental and technical data points, currently registers just 10 out of a possible 100. The firm characterized the recent price appreciation as “likely just a relief rally, not the start of a new bull phase.”
Nick Ruck, director at LVRG Research, attributed the rally to resurgent risk appetite and ETF capital inflows, though noted it “quickly faced headwinds” as macroeconomic uncertainty and weakening momentum triggered the reversal.
Chart Analysis Suggests Downside Risk
From a technical analysis perspective, Bitcoin displayed characteristics of a “failed auction” at the $74,000 resistance zone. Price briefly penetrated this level before encountering strong selling and closing below the threshold.
This resistance level coincided with the volume-weighted average price (VWAP), establishing a formidable dual resistance barrier that buyers couldn’t overcome.
With the value area high now compromised, market observers suggest a decline toward $60,000 — representing the prior weekly low — grows more probable should selling intensify.
SwissBlock analysts indicated Friday that “momentum is flashing a critical shift,” noting Bitcoin is “exiting peak negative momentum.”
Regarding demand dynamics, CryptoQuant highlighted a positive Coinbase Premium reading, indicating strengthened purchasing activity from American investors. Bitcoin spot demand from the US market shifted from contraction to expansion.
Selling activity from both active traders and long-term holders has moderated following unrealized losses reaching depths last observed in July 2022.
Bitwise Asset Management disclosed a $233,000 contribution to Bitcoin open-source development initiatives, marking its second annual donation linked to performance of its spot Bitcoin ETF product.
Bitcoin was changing hands near $70,182 during early Friday trading.
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