Bitcoin Drops Significantly After Bear Flag Fails — Is the $63,000 Level the Final Resistance

Bitcoin declines again after an unsuccessful recovery attempt since February 6. The BTC price has dropped nearly 3% in 24 hours and about 38% since mid-January. After rising from $60,100 to $72,100, buyers lost control, and the recovery weakened. Technical signals warned early, and on-chain data now confirm increasing selling pressure. The key question is simple: can the $63,000 level prevent the next decline, or will there be a deeper correction? Failed Bear Flag Pattern and RSI Divergence Confirm Downtrend After the January sell-off, Bitcoin formed a bear flag pattern on the daily chart. A bear flag appears when the price drops sharply and then weakly rebounds within a narrow range. It typically signals continuation of the downtrend rather than a reversal. Since mid-January, Bitcoin has fallen about 38% to nearly $60,130 and then rebounded to around $72,200 in early February. That rebound formed the flag pattern. On February 10, the price broke below the lower boundary of this structure, confirming the failure of the bear flag pattern. Momentum indicators warned of this move. The Relative Strength Index (RSI) measures buying and selling strength. When RSI rises while price weakens, it signals potential bearish pressure. From November 24 to February 8, Bitcoin made lower lows while RSI made slightly higher highs.

This creates a potential bearish divergence, a risk of a correction after the rebound. As the rally loses momentum, sellers regain control. The correction occurs when the RSI divergence signals lead to a breakdown of the pattern, after the market exhausts clear technical signals. But charts alone cannot explain everything, and on-chain behavior shows who is driving this move. Investors Are Selling Back as Confidence Wanes On-chain data shows long-term investors are reducing holdings. An important indicator is the Hodler Net Position Change, which tracks coins held in wallets for over 155 days. This indicator shows whether mid- and long-term holders are buying or selling over the past 30 days. On February 9, this indicator was near +8,142 BTC. By February 10, it had dropped to about +5,292 BTC. This sharp 35% decline indicates holders are slowing their buying and losing confidence. Selling pressure is quietly mounting beneath the surface. Another key indicator is the Long-Term Holder Net Position Change, focusing on wallets holding for over a year. On February 9, this was near -157,757 BTC (negative means continued selling). By February 10, this had expanded to about -169,186 BTC, a 7% increase. This shows long-term holders are selling faster. When both mid-term and long-term investors are selling simultaneously, the risk of further decline increases. The HODL wave confirms this shift. This indicator shows how supply is distributed over different holding periods. The 24-hour holder group represents short-term traders, who tend to react emotionally to price swings. From February 7 to 10, their ownership share increased from about 0.72% to 1.02%. This is a significant jump in fast-moving supply. These traders often sell quickly when prices drop, making support levels more vulnerable. Strong investors are selling, while short-term traders (speculators) are absorbing supply. This combination weakens market stability. The $63,000 Support Zone Becomes a Critical Bitcoin Price Area To identify potential support levels, traders look at the Realized Price Distribution of UTXO (UTXO Realized Price Distribution or URPD). This index shows where investors bought coins and highlights key cost basis clusters. These zones often act as support levels because holders defend their purchase prices. Currently, the strongest support cluster is around $63,100. About 1.3% of the total Bitcoin supply is concentrated in this range. This makes $63,000 a major demand barrier. On the price chart, Bitcoin has fallen below $67,350 and is gradually declining toward this zone. If the $63,000 level holds (around $63,240 on the chart), buyers may attempt to stabilize the market since many holders are still near break-even. If this level breaks, the risk will spike sharply. Failure could push many buyers into losses and trigger a massive sell-off. Below $63,000, the next significant resistance zone is near $57,740, and deeper panic could open the door to prices around $42,510. This would mark a complete reset of the recent structure. Conversely, the recovery remains challenging; Bitcoin must first regain $72,130 to reduce downward pressure. Only when surpassing $79,290 will the overall downtrend weaken. Until then, rallies are likely to be mere corrections. Currently, Bitcoin is caught between waning confidence and rising speculation. Although the bear flag failure outlined the path, investor selling further reinforces this. Everything now depends on the $63,000 level, which remains the market’s last clear line of defense.