Despite the improvement in US demand, the price of Bitcoin has declined by 40%
After slipping to $60,000 on February 6, Bitcoin's price has risen nearly 20%. The move renewed hopes of “buying the floodgates” and fueled talk of the local bottom. At the same time, US demand indicators are starting to recover from recent lows.
But underneath, the bullish signals, the data on the chain and the price structure suggest that the rally may be weak. A number of warning patterns now resemble setups that preceded major failures in this cycle.
A bear flag shows that big money is not fully given
One of the most obvious warning signs comes from the Klinger Oscillator, a volume-based indicator that tracks large cash flows.
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Unlike indicators such as the CMF, which mainly focus on short-term large currency pressures, the Klinger Oscillator measures large wallet size against trends. It is designed to emphasize not only the daily activities, but also how the big players position themselves over time.
Simply put, it shows that big money is being quietly accumulated or that a rally is being prepared to sell.
Between October 6 and January 14, Bitcoin fell from $126,000 to $97,800, a roughly 22 percent drop. During that period, the Klinger Oscillator moved higher as the price weakened. This created a bearish divergence.
That difference warned that volume strength in large wallets (probably whales and institutions) would not support a price recovery. Over the course of weeks, Bitcoin extended its decline toward $60,000 as Kliger readings dropped sharply.
The same pattern is reoccurring.
Between February 2nd and February 9th, the price dropped, while the Kliger Oscillator showed an upward trend. This suggests that larger players may be in a position to sell into pullbacks (recent purchases) rather than building long-term exposure.
At the same time, Bitcoin's drop from mid-January to early February created a very low “pole.” The current price movement is similar to a bear flag, this pattern usually shows the continuation of the downward trend, if the lower trend line provides support, it can reach 40%. That could trap the bulls buying.
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When bullish Kliger readings coincide with bearish flags, it usually means that rallies lack deep institutional support. Big players are active, but not in hoarding mode, and can spread at any opportunity. The BTC ETF's days of outflows in the near term confirm Klinger's lead hypothesis.
Improving America's interest has failed to mark the bottom before.
This technical weakness does not exist in isolation. It comes even as US interest begins to improve.
The Coinbase Premium Index tracks whether bitcoin is trading at a premium or discount on US-based Coinbase compared to global exchanges. It mainly reflects US institutional interests.
On February 4, the index fell to around -0.22, which showed a weak US participation. This level on December 31, 2024, the index dropped to -0.23. At that time, Bitcoin was trading around $93,300.
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Many traders believed that the bottom was formed. Instead, the price later dropped to $76,200, a nearly 18% discount.
Since early February, the index has recovered to around -0.07, reflecting improved US demand and in line with rising Klinger oscillator readings. However, history shows that a recovery in demand often precedes a downturn in prices, not later. In 2024, US demand improved first. Deep correction came later.
On-chain data adds another layer of risk.
The 1-day to 1-week holding group, which is made up of short-term traders, increased its supply share to more than 3.3% from 2.05% since February 5. That's an increase of more than 60% in days as reported by HODL Waves, a time-separation of wallets.
This group sells quickly when the price weakens. Their growing presence makes the market more volatile. A similar increase in short-term holders in late January was followed by a quick 3% return. So far, improving US demand has been coupled with speculation, not firm belief.
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Key Bitcoin price levels indicate where the Bounce may fall
All signals are now converging around a few critical Bitcoin price zones.
The first major support was placed at $67,350. A daily close below this level could resume selling pressure.
If this breaks down, the next downside targets:
$60,130, recent low $57,900 (key Fibonacci support and minor 18% retracement zone from current levels) $53,450 major recovery zone $43,470, bear flag forecast
A move to $43,400 from current levels represents a decline of about 35%. On the upside, Bitcoin needs to recover $72,330 to stabilize and break out of a possible bull trap. This level has broken recent rallies.
Beyond that, $79,240 remains critical. Recovering this zone will remove about half of the previous failure and possibly damage the bearing structure. Only then will the road to $97,870 reopen. Until this happens, all Bitcoin price rallies remain vulnerable.
