Bitcoin Reclaims $71K After Dip, Bulls Defend Critical Support

Bitcoin bounced back Monday after slipping under the $70K handle in thin early trading, snapping up bids and cruising back into the $70,800-$71,300 range. The move calmed nerves across a market that has been riding a roller coaster of liquidations, ETF flows, and macro jitters.

Traders now have one big question: Is this just a pit stop, or the base for the next leg higher?

Below is a breakdown of the numbers, the levels pros are stalking, and what the data says about where price could roll next.

Overnight Drop Shakes Weak Hands

During the low-liquidity hours, Bitcoin wicked down to roughly $69,991, triggering clusters of stop losses parked just under the psychological $70,000 level. Within minutes, spot buyers stepped in and perpetual futures funding began to flatten, a classic sign that overheated leverage was getting flushed.

By mid-session, BTC had reclaimed more than 1.5% from the local bottom.

Market structure watchers note this kind of sweep-and-reclaim behavior often resets momentum without doing major technical damage. In plain English: tourists get washed out, longer-term players reload.

Volume and Liquidation Data Tell the Story

Derivatives desks reported a spike in forced unwinds as the dip accelerated. Estimates across major exchanges suggest tens of millions of dollars in long positions were liquidated in a short window.

At the same time, spot volume rose as price reclaimed $71K, implying real buyers  not just short covering  helped drive the bounce.

Key metrics traders are tracking right now:

• Open interest: cooling rather than expanding

• Funding rates: drifting back toward neutral

• Order books: thicker bids building above $70K

• Volatility: elevated but no longer cascading

The Big Line in the Sand: 200-Week Moving Average

Every cycle has a break glass in case of emergency level. For this one, many analysts peg it at the 200-week moving average, sitting near $58,000.

Historically, Bitcoin has rarely spent meaningful time below this trend line. It has acted as a generational value zone in prior bear markets and a confidence gauge during bull phases.

With price currently more than 20% above that marker, long-term investors argue the macro uptrend remains alive and kicking.

Unless BTC starts living under that level, they see pullbacks as corrections  not reversals.

Momentum Versus Resistance

While the rebound looks healthy, bulls still have work to do.

Chart watchers point to supply stacked between $72,500 and $73,500, an area where previous rallies stalled. Flipping that region into support could open the door for another attempt at recent highs.

Fail there, and the market may chop sideways while liquidity rebuilds.

Short-term momentum indicators are mixed: RSI has cooled from overbought territory, but hasn’t yet reset to deeply oversold conditions that typically precede explosive bounces.

ETFs, Institutions, and the Bigger Picture

Recent weeks have shown alternating days of inflows and outflows in U.S. spot Bitcoin ETFs, creating push-pull dynamics that amplify intraday volatility. When inflows rise, dips tend to get bought fast. When they fade, price can sag quickly.

Institutional desks say clients remain interested but more selective, often waiting for technical confirmation rather than chasing green candles.

What Traders Are Watching Next

Going forward, three scenarios dominate trading chats:

1. Hold above $70K - confidence rebuilds, grind higher possible.

2. Lose $70K briefly but reclaim - another leverage reset.

3. Sustained break lower - deeper retrace toward high-$60Ks.

For now, Bitcoin is hanging tough, and bulls are relieved the market didn’t spiral after the stop hunt.