Bitcoin Bulls Strike Back, but $78 K May Hold the Line

Key takeaways

- Derivatives and on‑chain metrics reveal that bullish confidence is still tentative; almost half of all Bitcoin holdings are currently underwater.
- Rising electricity costs driven by the AI boom are pushing mining profitability to historic lows, prompting several listed miners to sell BTC and pivot toward high‑performance computing.
- The $76 000 price area, roughly the average acquisition cost for major corporate holders such as Strategy, represents a psychological barrier that could shape short‑term momentum.

Market momentum resurfaces

Bitcoin rallied 22 % from the $60 000 trough recorded on 6 February and climbed to a four‑week peak on Wednesday, nudging the price toward the $78 700 level that closed January’s monthly cycle. The upside suggests that the market is no longer confined to the narrow range that followed the 32 % crash in early February.

Nevertheless, the rally is not being matched by a surge in bullish sentiment on the derivatives front. The 30‑day put‑call skew on a major options venue remains at a 10 % put premium, a level that historically signals a defensive stance. In a neutral market the skew typically oscillates between –6 % and +6 %; the current figure is reminiscent of the bearish environment seen when Bitcoin hovered near $95 000 in mid‑January.

Futures activity also points to caution. The annualised basis—the difference between spot and futures prices—continues to sit below the 5 % threshold that many traders regard as a sign of balanced demand. In other words, while spot prices are inching upward, the appetite for long futures contracts has not revived.

On‑chain picture: many holders still in the red

Glassnode’s on‑chain analytics estimate that roughly 43 % of the circulating supply is presently held at a loss. This proportion has risen sharply from about 30 % when Bitcoin traded near $90 000 at the end of January. Investors who are underwater may be inclined to unwind positions as prices rise, creating persistent sell pressure that could cap further upside.

The figure underscores why the market’s recovery is being paced by a sizable “loss‑realisation” cohort rather than a clear‑cut bullish breakout.

Mining profitability under strain

The surge in demand for artificial‑intelligence workloads is inflating electricity prices, squeezing the economics of Bitcoin mining. The hash‑price index—a metric that reflects the daily revenue expected from one terahash per second of mining power—has dropped to roughly $30, down from $39 three months ago.

Faced with shrinking margins, several publicly listed mining firms have begun reallocating capital toward AI‑focused high‑performance computing services and are off‑loading portions of their Bitcoin reserves. This trend adds another layer of downward pressure, as miners who have accumulated BTC during the recent dip may become net sellers once the price stabilises.

Corporate cost‑basis hurdle

Strategy (MSTR) remains the most prominent example of a publicly traded entity with a balance sheet heavily weighted toward Bitcoin. The firm’s average acquisition price sits near $76 000 per BTC, a level that now aligns with the current market price. Other companies with sizeable Bitcoin holdings, such as Japan’s Metaplanet and the U.S.‑based Twenty One Capital, face comparable cost‑basis challenges.

Because exceeding this $76 000 benchmark would allow these firms to issue additional equity without diluting existing shareholders, there is a clear incentive for market participants to keep Bitcoin below that threshold. Consequently, the $78 000 zone—just above the corporate break‑even point—could act as a resistance band that testers must breach before sustained bullish momentum is established.

Outlook

The recent price surge indicates that the bulls are re‑entering the market, but the confluence of defensive options positioning, a significant proportion of loss‑making holders, and weakened miner economics suggests that the rally may face headwinds.

If Bitcoin can decisively close above the $78 000 level, it would signal that market participants are willing to push past the $76 000 cost‑basis ceiling of major corporate holders, potentially unlocking a new phase of upward movement. Conversely, a failure to break through could see the price retreat to the $73 000‑$74 000 range, where downside protection remains abundant.

The analysis presented here is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making any trading decisions.

Source: https://cointelegraph.com/news/bitcoins-bullish-momentum-accelerates-but-topping-78k-remains-a-challenge?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound