Bitcoin is currently trading around $73,023, marking a 2.6% daily gain and a sharp recovery from a recent low of $70,500. This rebound of $2,500 in under twelve hours has pushed the price back above the critical 50-day Simple Moving Average (SMA) at $71,625, a key technical level it had lost during a market crash on April 12.
However, underlying on-chain metrics paint a more complex picture. According to analysis from CryptoQuant, Bitcoin has fallen below the 20th quantile of the long-term Bitcoin Power Law model, currently sitting at a quantile of 18.5%. This model, based on logarithmic regression across Bitcoin's entire price history, suggests the asset has spent only 18.5% of its existence at this relative valuation level. Analyst Darkfost noted, "We are now approaching extreme undervaluation levels," indicating that by this historical measure, Bitcoin appears cheap.
This undervaluation signal clashes with the immediate market reality shaped by significant geopolitical events. Over the weekend, failed peace talks between the US and Iran were followed by an announcement from President Trump that the US Navy would begin blockading the Strait of Hormuz. This escalation triggered a 7% jump in oil futures and contributed to a massive single-day crypto market loss of $83 billion, with total capitalization falling from $2.47 trillion to $2.39 trillion. Bitcoin itself shed $3,200 on the initial news.
The technical recovery remains fragile. While the price has reclaimed the 50 SMA, the hourly chart's Relative Strength Index (RSI) surged from an oversold reading of 28 to an overbought 70.80 in a very short timeframe, suggesting the move was rapid but potentially unsustainable. The key resistance level is seen at $73,500, with critical support at the psychological $70,000 level. A break below $70,000 could see a drop toward $65,000.
Furthermore, the CryptoQuant Bull-Bear Market Cycle Indicator remains in a bear phase and has not yet entered "Extreme Bear" territory, which historically signals maximum stress and capitulation. This indicates that, despite the price recovery, the macro bottom for this cycle has not been confirmed. On-chain data reveals the scale of the damage: 13.5 million Bitcoin addresses are currently holding at a loss, a direct consequence of the decline from the October 2025 peak above $126,000.
Market expectations for monetary policy add another layer of pressure. According to the CME FedWatch Tool, there is over a 98% probability the Federal Reserve will hold interest rates steady at its upcoming April and June meetings. Analysts like Nic Puckrin of Coin Bureau suggest the economic fallout from geopolitical tensions will dominate markets through Q2, with potential rate cuts pushed to Q3 or Q4 at the earliest.
