Bitcoin's Broken Rally: Why $69K Feels Like Purgatory

Bitcoin at $69,000 should feel like a win. A year ago, that number would've had people dancing in the streets. But we're not dancing. We're staring at screens, watching the fourth straight weekly decline, and wondering if the floor is about to give out.

I think we're in purgatory. Not a crash. Not a rally. Just... stuck.

THE $85K LINE IN THE SAND

Jean-David Pequignot, Deribit's chief commercial officer, put it bluntly at Consensus Hong Kong last week. Bitcoin's long term rally is "broken" until it reclaims $85,000. That's not some random number he pulled from a hat. It's the level where buyers would need to absorb all the overhead supply that's been piling up since the October highs.

And we're nowhere close. BTC is sitting around $69,100 as I write this. That's a 45% drop from the all time high. Four straight red weeks. The longest losing streak since mid November.

So what's holding it up? The $60,000 level. Pequignot calls it a "major psychological level" with large buy walls historically sitting there. If that breaks on a closing basis, he says the 200 week moving average around $58,000 becomes "the next logical, and possibly final stop."

For anyone who's been around long enough, that 200 week MA is basically the market's bottom detector. Every bear market since 2015 has bounced near it. If $58K comes into play, you can bet the buy orders will be stacked deep.

BLACKROCK SAYS THE QUIET PART OUT LOUD

Here's what caught my attention this week. Robert Mitchnick, BlackRock's head of digital assets, basically told a room full of investors that bitcoin's trading behavior is undermining its own story.

His words: bitcoin looks like "levered NASDAQ."

Think about that for a second. The guy running digital assets at the world's largest asset manager, the company that launched the most successful bitcoin ETF in history, is saying the market's addiction to derivatives is making BTC look like a tech stock on steroids. Not a hedge. Not digital gold. A levered tech bet.

He pointed to the October 10th crash as an example. Some minor tariff news hit, and bitcoin dropped 20%. Not because the news was that bad. Because cascading liquidations on perpetual futures platforms created a domino effect that had nothing to do with fundamentals.

And he made an important distinction. It's not the ETFs causing this mess. IBIT saw only 0.2% redemptions during the worst week. The instability is coming from offshore margin trading. Perps. Degen bets. The stuff that makes crypto feel like a casino when institutions are trying to treat it like an asset class.

I think Mitchnick is right. And that's uncomfortable, because it means the biggest threat to bitcoin's next leg up isn't regulation or macro. It's us. It's the market's own structure.

THE FEAR IS REAL

The Crypto Fear and Greed Index has been sitting in "extreme fear" for almost two weeks straight. Bitwise research analyst Danny Nelson described the mood perfectly: "The market's main driver right now is fear. Fear that we'll go lower."

He noted something interesting. Good news isn't registering. When BlackRock listed BUIDL on Uniswap, UNI jumped 25%. Then gave it all back. Investors saw a bounce and sold into it. "If they see an exit ramp, they're taking it," Nelson said.

That's textbook bear market psychology. It doesn't mean we're in a full blown bear market yet. But the behavior is bearish. People aren't buying dips for conviction. They're selling bounces for relief.

WHO'S ACTUALLY BUYING?

Not everyone is running for the exits. XRP has quietly ripped 38% since the Feb. 6 crash low, outpacing both bitcoin and ether, which are up about 15% over the same period.

CryptoQuant data shows Binance's XRP reserves dropped by 192 million tokens between Feb. 7 and 9. That's a 7% slide to the lowest level since January 2024. When coins leave exchanges at that pace, it usually means someone is accumulating and moving to self custody. They're not planning to sell anytime soon.

It's a familiar pattern. XRP did the same thing in late 2024 before rallying from $0.60 to over $2.40. Exchange outflows preceded the move by weeks.

PEPE is also having a moment, up almost 15% in 24 hours. Venice Token (VVV) ripped 40% in a day. Even Dogecoin added 5%. The memes and alts are moving while bitcoin consolidates. That can mean different things depending on who you ask, but it often signals risk appetite returning at the edges while the big names chop sideways.

WHAT I'M WATCHING

Three things matter over the next two weeks.

First, the $60K level. If bitcoin closes a weekly candle below it, the 200 week MA at $58K becomes the target. That's where long term holders and institutions will likely step in heavy.

Second, margin levels. Mitchnick's warning isn't just talk. If open interest on perps keeps climbing while spot volume stays thin, every little macro headline will trigger outsized moves. Watch the funding rates. When they're deeply negative, it means shorts are paying to stay in position. That's often a contrarian buy signal.

Third, the macro calendar. CPI data dropped this week, and the market barely reacted. That's either because it was priced in, or because crypto is temporarily decoupled from macro. Both options tell you something. If a government shutdown materializes (Kalshi had it at 90% odds), expect a volatility spike into thin weekend liquidity.

THE BOTTOM LINE

We're in one of those stretches where the market tests your conviction. Everything feels uncertain. The chart looks weak. The narrative is confused. Is it digital gold? Is it levered NASDAQ? The answer probably depends on the timeframe you're looking at.

Short term? Bitcoin is broken below $85K and grinding lower with borrowed money amplifying every move. Medium term? The $58K to $60K zone is the line where history says buyers show up. Long term? BlackRock isn't building out an entire digital assets division because they think this is going to zero.

My read: we probably test $60K before this is over. If that holds, it's going to be one of the better buying opportunities we've seen in years. If it doesn't hold, $58K and the 200 week MA are the last line of defense before things get genuinely ugly.

Either way, sitting at $69K right now is the worst place to be. Too low for confidence. Too high for capitulation. Purgatory.

Hold your positions. Size down if you need to. And don't let the margin traders shake you out.