Tradzar
Bitcoin Price Analysis Powered by AI
BTC Capitulation Bounce Into Heavy Supply: Relief Rally Likely to Fade Over the Next 24 Hours
Market Snapshot (BTC)
- Current price: $70,331.46 (2026-02-06 21:58 UTC)
- Context (daily): Sharp capitulation into $62,702 (Feb-05 close) followed by a violent mean-reversion rally to $70,331 (Feb-06 close).
- 24h regime: Transition from panic selloff → short-covering / relief rally with very high volume.
1) Multi-Timeframe Trend & Structure
Daily (swing structure)
- From mid-Nov (~105k) to early Feb (~62.7k): clear downtrend with persistent lower highs / lower lows.
- Recent sequence:
- Feb-04 close: 73,019
- Feb-05 close: 62,702 (breakdown / flush)
- Feb-06 close: 70,331 (reclaim attempt)
- Interpretation: This is not yet a confirmed trend reversal; it is a counter-trend rebound inside a broader bearish structure.
Key Daily Levels (Support/Resistance)
- Major support zone: $62,000–$60,000 (flush low area; Feb-06 low ~60,075)
- Near resistance / supply: $71,000–$73,000 (prior breakdown area + Feb-04 close ~73,020)
- Higher resistance: $75,500–$78,700 (Feb-01/Feb-02 area)
Conclusion (structure): Price is rallying into overhead supply. Unless BTC can accept above ~$73k, rallies are likely to be sold.
2) Candlestick & Price Action Reading
Daily candle behavior
- Feb-05: large bearish continuation candle with extreme volume → capitulation / forced liquidation signature.
- Feb-06: large bullish candle (close near highs relative to range) → short-covering + bargain bid.
This pairing often produces a dead-cat bounce / relief rally that then retests lower or consolidates before deciding the next leg.
Intraday (hourly) micro-structure
- Strong impulsive move from mid-60s to low-70s.
- High at ~71,439 followed by pullback to ~69.4k and re-bid to ~70.7k.
- Current price ~70.33k sits below the intraday peak, implying momentum cooling.
3) Volume & Volatility Diagnostics
Volume
- Daily volumes Feb-05 and Feb-06 are extremely high (capitulation + rebound).
- This often marks a temporary equilibrium zone where large players distribute into strength.
Range / Volatility
- Feb-06 daily range: ~60,075 → 71,159 (≈ $11k).
- Such expansion typically leads to volatility compression next (chop) or retest of breakout origin.
Implication for next 24h: Expect wide intraday swings; chasing breakouts is risky.
4) Moving Averages (conceptual, given dataset)
- Given the long drawdown from 105k to 62k, price is likely below major daily MAs (50D/100D/200D).
- Today’s rally likely approaches or remains below declining short-term averages, which act as dynamic resistance.
Bias: rallies into ~$71k–$73k are statistically more likely to face selling in a bearish MA slope environment.
5) Momentum (RSI/MACD-style inference)
- The magnitude of the rebound after a capitulation suggests:
- Daily RSI likely moved from oversold toward neutral rapidly.
- Intraday RSI likely hit overbought near the ~71.4k peak and is now normalizing.
- In bearish regimes, momentum snaps from oversold → neutral and then rolls over again.
Implication: Momentum favors mean reversion down rather than immediate continuation up, unless $73k is reclaimed and held.
6) Fibonacci / Retracement Logic (from the flush)
Using the flush swing Low ~60,075 to High ~71,159:
- 38.2% retrace: ~66,900
- 50% retrace: ~65,600
- 61.8% retrace: ~64,300
These levels become natural pullback magnets if the relief rally fades.
7) Support/Resistance Map (next 24h actionable)
Resistance (sell zones)
- $71,000–$71,500 (intraday high / first supply)
- $72,800–$73,200 (major: breakdown / Feb-04 close region)
Support (cover / bounce zones)
- $69,300–$69,600 (intraday pivot area)
- $66,800–$67,200 (Fib 38.2% / likely first deeper support)
- $64,200–$65,700 (Fib 50–61.8%)
8) 24-Hour Price Movement Forecast (probabilistic)
Given the broader downtrend + capitulation bounce into supply:
- Base case (55%): pullback / consolidation with downside retest toward $69k, potentially $67k.
- Bear case (25%): rejection at $71k–$73k leads to sharper fade toward $65.5k.
- Bull case (20%): sustained acceptance above $73k opens room toward $75.5k–$78k.
Net: Slight bearish over next 24h (expect sellers to defend overhead supply).
9) Trade Thesis (Decision)
Why Sell (Short) now?
- Macro structure remains bearish (multi-month downtrend).
- The current move looks like a relief rally after forced selling.
- Price is approaching dense resistance ($71k–$73k) where trapped longs and distribution typically occur.
- Volatility is extremely high; mean-reversion after such an impulse is common.
Invalidation (what would prove this wrong): Clean break and hold above ~$73,200 (acceptance over the breakdown zone).
Execution Plan (optimal entry/exit)
- Prefer not to short at market after a large green daily candle; instead, place a limit sell into resistance.
- Open (Short) ideal: near the first supply test where R:R is best.
- Take profit: near first major support / retracement target.
Suggested levels:
- Open short: $71,200 (limit)
- Close / take-profit: $67,200 (first deeper support + Fib/structure)
(These levels align with: resistance at prior intraday high zone and support at the 38.2% retrace / likely retest area.)