Bitcoin's recent price rebound, which saw a nearly 12% recovery from its February 24 low to briefly touch $70,000, has stalled due to a critical lack of market conviction and significant on-chain supply resistance. According to Dessislava Ianeva, a Research Analyst at Nexo, while technical signals are improving, underlying demand remains weak, preventing a sustained breakout above the crucial $70,000 to $70,800 zone.
Trading volume has plummeted more than 58% compared to earlier in February, dropping from $125.5 billion to around $52 billion. Ianeva notes that "in 2026, BTC average trading volumes are down roughly 17% versus the 2025 average, reflecting subdued market participation." This decline in active traders is a major headwind for sustaining price rallies.
Further evidence of weak conviction comes from derivatives markets. Open interest in Bitcoin futures has dropped sharply by 43%, from approximately $37.5 billion in January to around $21.5 billion currently. Ianeva interprets this as "orderly deleveraging rather than systemic stress," indicating a stabilization but a notable absence of aggressive buying pressure.
Perhaps the most significant obstacle is the persistent selling by long-term Bitcoin holders. The Long-Term Holder Net Position Change metric shows a net reduction of 75,911 BTC on a 30-day rolling basis, only a slight slowdown from the 78,583 BTC reduction seen on February 24. This ongoing distribution by historically strong hands contrasts with the typical accumulation phase seen at the start of sustainable bull runs.
On-chain data reveals a formidable supply cluster acting as resistance. The UTXO Realized Price Distribution (URPD) shows two key clusters: one at $69,400 holding 0.93% of supply and another at $70,600 holding 0.60%. Together, this 1.5% of total supply creates a strong selling zone as investors look to break even. A decisive break above $70,800 is seen as critical, as supply thins significantly above that level, with the next major target near $78,600—an 11% potential upside.
Technically, Bitcoin is forming a bullish cup and handle pattern, but the breakout remains unconfirmed below the neckline resistance. The Smart Money Index (SMI) did show an early rise on February 24, similar to a signal that preceded a 7% gain in mid-February, suggesting informed traders are positioning. However, Ianeva concludes that "macro uncertainty continues to constrain liquidity," and until long-term holders shift to accumulation and volume returns, Bitcoin's upside near major resistance may remain limited.
