Bitcoin Price Forecast: BTC extends gains above $81,000 as weak on-chain data keeps caution in play

Bitcoin (BTC) extends its rally above $81,000 at the time of writing on Tuesday, supported by strong inflows into BTC spot Exchange Traded Funds (ETFs). Despite the bullish price action, traders should be cautious, as muted on-chain activity signals fragile conditions and suggests the potential for a near-term pullback in the Crypto King’s price.

Institutional demand remains strong

Institutional demand began the week on a positive note, further supporting the largest cryptocurrency by market capitalization. SoSoValue data show that US-listed BTC spot ETFs recorded inflows of $532.21 million on Monday, marking the third consecutive day of positive inflow. If this trend continues this week, BTC could see a further price rally.

Why does the current price surge seem fragile?

Santiment data below shows that Bitcoin’s overall on-chain activity has fallen to a 2-year low in the midst of BTC returning above $80,000, price levels not seen since the last three months.

Historically, such price increases that aren’t supported by growing on-chain participation tend to be fragile. 

“There’s simply less’ buying fuel’ behind the move. If those larger players decide to take profits, there may not be enough fresh demand from new users to absorb the selling and keep prices elevated,” said Santiment’s analyst. 

Apart from this divergence in on-chain and price, as explained in a previous report, the current BTC price surge is mostly driven by perpetual futures demand while spot markets remain in contraction.

Traders should be cautious, as the current market structure is more speculative than fundamental, mirroring the pattern seen at the onset of the 2022 bear market.

Bitcoin Price Forecast: BTC nears key resistance zone

Bitcoin price is trading around $80,900 as of writing on Tuesday, maintaining a bullish near-term bias as it holds well above the 50-day and 100-day Exponential Moving Averages (EMAs) on the daily chart, clustered around $74,700–$76,000, and trades north of the 50% retracement from the January high to the February low at roughly $78,962. 

A recovering Moving Average Convergence Divergence (MACD) histogram on the daily chart and the Relative Strength Index (RSI) near 68 hint at firm upside momentum, though approaching near-overbought territory, while the 200-day EMA at about $81,917 now acts as the first meaningful cap overhead.

On the topside, immediate resistance is seen at the 200-day EMA near $81,917, followed by the 61.8% Fibonacci retracement at around $83,437 and a horizontal barrier at $84,410 as a more distant hurdle. 

On the downside, initial support is located at the psychological $80,000 mark, ahead of the 50% retracement at $78,962, while deeper pullbacks would likely look to the 100-day EMA near $75,995, the former channel top around $75,680, and the 50-day EMA just above the 38.2% Fibonacci retracement near $74,500 as a broader demand zone.

(The technical analysis of this story was written with the help of an AI tool.)