Despite the recent rally, bitcoin faces a triple threat of resistance

Bitcoin crossed $72,000 on Wednesday for the first time since February 4, breaking through a key resistance band at the $70,000 level, but is now stalling in the $71,000 to $72,000 range as the war in Iran is pressuring risk assets and caution is ruling the market.

Bitcoin ETFs are also rebounding, registering $1.15 billion in inflows so far in March, according to SoSoValue.

While bitcoin broke out of “$60K purgatory,” which represents an “important psychological achievement,” whether this rally will keep chugging is mostly up to global affairs, Danny Nelson, a research analyst at Bitwise, told Sherwood News.

“The war with Iran could easily get uglier, and if it does, investors will likely hit the brakes on risk assets. That’s the problem with bitcoin right now. It’s a store-of-value asset that acts more like a growth stock day to day,” Nelson said.

Experts agree that, in addition to geopolitical tensions, bitcoin is still facing many other headwinds that could hinder its momentum.

Jean David Péquignot, chief commercial officer at Deribit, said that despite the recent rally, bitcoin’s price faces a triple threat of resistance:

• The 50-day moving average (~$76,000) remains a major hurdle, as markets rarely clear such levels without a consolidation phase.

• In addition, major miners like MARA Holdings and Core Scientific are pivoting toward AI infrastructure, liquidating significant bitcoin reserves to fund the transition. “This creates a substantial supply overhang that the market must absorb,” he said.

• Finally, Péquignot noted the Iran crisis and Brent crude’s climb to $81 are reigniting inflation fears.

“The immediate outlook remains risky due to overbought technicals and miners dumping supply. Traders should be ready for a retest of the $70K support level before any sustained move toward new highs,” he said.

In another sign of caution, Rajiv Sawhney, head of international portfolio management at Wave Digital Assets, said that much of the latest buying over the last several hours has been in the perpetuals, with Binance seeing a surge of more than 7,500 in open interest, the largest single four-hour open interest buildup since 2023. 

Sawhney told Sherwood that perpetual leverage from momentum traders tends not to be as healthy and organic as spot institutional buying, so it remains to be seen whether this last leg above $70,000 to $74,000 can be sustained.

“The most likely scenario is a period of elevated volatility between the $68K and $78K levels, followed by a decisive move in either direction,” he said.

On the other hand, a sustained close above $78,000 on continued ETF inflows would validate a breakout and open a path toward $84,000 to $88,000.

“Failure at resistance with a perpetual open interest flush would reset to the $65-66K support range,” he said.

One hopeful sign is that bitcoin has now closed above its highest-volume cluster since 2023 and above its 200-week exponential moving average, Pratik Kala, portfolio manager and head of research at Apollo Crypto, told Sherwood.

“The largest cluster typically indicates a lot of buying/selling activity at that price point, and then we wait for either the buyers or sellers to exhaust. Because we moved up right now, it seems that the sellers are exhausted, but it’s too early to tell if we’re out of the woods,” he said.  

A Glassnode report echoed the sentiment, noting that several indicators suggest buy-side momentum has materially weakened and that options data suggests fading downside fear and growing upside interest around $75,000.

“With the $75K strike emerging as a major gamma magnet, the market appears to be transitioning from stress-driven selling toward a more balanced positioning regime. Whether this evolves into a sustainable recovery will ultimately depend on the return of stronger spot demand to absorb overhead supply,” the Glassnode analysts said.