Bitcoin Price Forecast: BTC extends gains above $81,000 as weak on-chain data keeps caution in play
- Bitcoin surges above $81,000 on Tuesday, extending gains from the previous day.
- US-listed spot ETF recorded an inflow of $532.21 million on Monday, marking the third consecutive day of positive flows.
- The recent price surge isn’t supported by growing on-chain participation, suggesting still fragile conditions.
Bitcoin (BTC) extends its rally above $81,000 at the time of writing on Tuesday, supported by strong inflows into BTC spot Exchange Traded Funds (ETFs). Despite the bullish price action, traders should be cautious, as muted on-chain activity signals fragile conditions and suggests the potential for a near-term pullback in the Crypto King’s price.
Institutional demand remains strong
Institutional demand began the week on a positive note, further supporting the largest cryptocurrency by market capitalization. SoSoValue data show that US-listed BTC spot ETFs recorded inflows of $532.21 million on Monday, marking the third consecutive day of positive inflow. If this trend continues this week, BTC could see a further price rally.
Why does the current price surge seem fragile?
Santiment data below shows that Bitcoin’s overall on-chain activity has fallen to a 2-year low in the midst of BTC returning above $80,000, price levels not seen since the last three months.
Historically, such price increases that aren’t supported by growing on-chain participation tend to be fragile.
“There’s simply less’ buying fuel’ behind the move. If those larger players decide to take profits, there may not be enough fresh demand from new users to absorb the selling and keep prices elevated,” said Santiment’s analyst.
Apart from this divergence in on-chain and price, as explained in a previous report, the current BTC price surge is mostly driven by perpetual futures demand while spot markets remain in contraction.
Traders should be cautious, as the current market structure is more speculative than fundamental, mirroring the pattern seen at the onset of the 2022 bear market.
Bitcoin Price Forecast: BTC nears key resistance zone
Bitcoin price is trading around $80,900 as of writing on Tuesday, maintaining a bullish near-term bias as it holds well above the 50-day and 100-day Exponential Moving Averages (EMAs) on the daily chart, clustered around $74,700–$76,000, and trades north of the 50% retracement from the January high to the February low at roughly $78,962.
A recovering Moving Average Convergence Divergence (MACD) histogram on the daily chart and the Relative Strength Index (RSI) near 68 hint at firm upside momentum, though approaching near-overbought territory, while the 200-day EMA at about $81,917 now acts as the first meaningful cap overhead.
On the topside, immediate resistance is seen at the 200-day EMA near $81,917, followed by the 61.8% Fibonacci retracement at around $83,437 and a horizontal barrier at $84,410 as a more distant hurdle.
On the downside, initial support is located at the psychological $80,000 mark, ahead of the 50% retracement at $78,962, while deeper pullbacks would likely look to the 100-day EMA near $75,995, the former channel top around $75,680, and the 50-day EMA just above the 38.2% Fibonacci retracement near $74,500 as a broader demand zone.
(The technical analysis of this story was written with the help of an AI tool.)
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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