The price of Bitcoin has recovered more than 4% since February 19, surpassing $68,200 again. This movement brought temporary relief after weeks of fragility. However, new technical and blockchain signals indicate that Bitcoin may be close to reaching its riskiest level of 2026.
A combination of bassist graphic structure, significant groups of offers below price, and increasing leverage risk indicates that a deeper correction may begin soon.
Bearish pattern and greater supply concentration create immediate risk
The 8-hour chart of Bitcoin currently reveals a triple top pattern of the 'head and shoulders' type. This is a bearish reversal configuration formed when the price presents three peaks, with the middle one higher than the other two. The pattern indicates weakening buying strength and increased selling pressure.
At the same time, Bitcoin outlined a hidden bearish divergence between February 6 and 20. During this period, Bitcoin's price recorded a lower peak, signaling that the recovery was not sufficient to regain the previous level.
However, the Relative Strength Index (RSI) established a higher peak.
The RSI evaluates buying and selling momentum on a scale from 0 to 100. When the RSI rises, but the price does not follow, it indicates that buying strength is diminishing. This pattern often precedes pullbacks or price declines.
The main risk now comes from cost levels on the Bitcoin blockchain. Data from the Realized Price Distribution by UTXO (URPD) shows that the largest supply grouping is concentrated above $66,800. This range holds 3.17% of the total circulating Bitcoin supply.
Another significant grouping appears at $65,636, concentrating another 1.38% of the supply.
These levels are relevant as they represent prices at which many investors acquired Bitcoin. If the asset falls below these values, investors may sell to avoid losses, which could quickly accelerate the decline process.
Together, these groupings represent more than 4.5% of the concentrated Bitcoin supply just below the current price. This creates a high-risk zone immediately under the asset's support, reinforcing the alert about the market price.
If Bitcoin closes below this region, the realization of the 'head and shoulders' pattern may gain strength.
High leverage and ETF outflows increase liquidation risk
Derivatives data reveals an increase in liquidation risk with the recent Bitcoin recovery. The open interest, which measures the total value of active future positions, jumped from $19.54 billion on February 19 to around $20.71 billion now, during the upward movement.
This demonstrates that more active traders opted for leveraged positions during the recovery.
At the same time, funding rates have turned positive. These are payments between long and short traders. Positive funding indicates a prevalence of bullish bets, increasing the risk-prone environment.
If the Bitcoin price starts to fall, these leveraged long positions may be forcefully liquidated. This triggers the so-called short squeeze, where optimistic traders are removed from their positions, amplifying the liquidation movement and further pressuring the asset's price.
Institutional sentiment remains weakened. Spot Bitcoin ETFs have already recorded five consecutive weeks of net outflows. This indicates that institutional investors continue to withdraw capital instead of accumulating.
This reduces support during price declines.
Bitcoin price faces critical testing below institutional resistance
Bitcoin also remains below its monthly Volume Weighted Average Price (VWAP), which is near $70,000. The VWAP represents the average value of the currency, adjusted by the volume traded. The monthly reference is widely used by the financial market as a basis for institutional cost.
When Bitcoin is traded below the VWAP, the average position of institutions is negative. This often leads large investors to reduce their exposure or avoid new purchases, justifying the apathy in ETFs.
A rise above $70,000 would indicate new institutional strength. However, while it remains below this level, recovery attempts may be limited, and the overall structure remains bearish.
According to technical analysis, Bitcoin's first support is near $67,300. If this level is broken, the next support is observed at $66,500, followed by $65,300. These levels coincide with important supply zones already reported. If these regions are not maintained, a broader top configuration may be triggered, breaking the neckline at $60,800.
A decline could then trigger a depreciation target exceeding 7.5%, pointing to a price around $56,000 in the short and medium term.
From a bullish perspective, Bitcoin needs to recover $68,200 to stabilize its short-term structure. However, a complete reversal depends on the resumption of the $70,000 VWAP.