Bitcoin has fallen over the past 24 hours, trading near $78,700 on Aug. 27 after its rejection above $81,000 extended into a second day of selling.
CoinGecko data showed Bitcoin trading around $78,747 at the time of writing, down roughly 0.4% over 24 hours, while its seven-day gain remained close to 13.8%.
$BTC has recovered from an intraday drop towards $77,600, but has so far struggled to reclaim $79,000.
The pullback began after Bitcoin reached an intraday high of $81,265 on Aug. 25 and ran into its 50-week moving average near $81,085, according to CoinDesk.
The rejection also placed $BTC below a resistance area extending towards the May swing high near $82,800.
Selling at those levels followed a rapid rally that had pushed Bitcoin up more than 23% in a week.
The move above $80,000 had been supported by a weaker US dollar and demand linked to concerns over currency debasement, while the rally also left traders holding substantial short-term profits.
Part of the run-up had come from forced buying in the derivatives market.
Glassnode data showed the largest single-day Bitcoin short liquidation event since 2019 on Aug. 19, with short positions accounting for roughly 85% of liquidations.
As those positions were cleared, one source of buying behind the rally diminished.
Leverage then started working in the opposite direction as traders opened long positions during the climb.
When Bitcoin failed to hold $80,000, long liquidations added to spot selling, with one liquidation window wiping out roughly $324 million in crypto positions, including close to $270 million in longs.
By Aug. 26, derivatives positioning had weakened further, with shorts accounting for roughly 51.6% of taker volume and Bitcoin futures open interest dropping below 700,000 $BTC.
CryptoQuant has also flagged elevated unrealised profits and increased exchange inflows following the rally, leaving more coins available to be sold if holders take profits.
At the same time, the firm said its Bitcoin Bull Score had jumped from 30 to 80 in a week, with eight of its 10 tracked metrics turning bullish and spot demand expanding at its fastest monthly pace since late December.
However, spot ETF demand has remained one counterweight to the selling.
US spot Bitcoin ETFs recorded $314.37 million in net inflows on Aug. 25, according to SoSoValue data, extending their run to seven consecutive sessions.
BlackRock's IBIT accounted for $284.42 million of the day's total, while no fund recorded a net outflow.
Traders are now looking towards Aug. 28, when around 81,700 Bitcoin options worth $6.44 billion are scheduled to expire on Deribit at 08:00 UTC.
According to market reports, the $75,000 strike holds $236 million in call open interest, while another $157 million sits at $80,000.
More than $500 million in notional value is positioned within 5% of $BTC's current price, which Deribit chief risk officer Shaun Fernando said could increase gamma hedging into the expiry.
$BTC price action
Bitcoin's daily chart still carries a bullish trend structure despite the two-day pullback, although momentum indicators show the rally has become stretched after the rapid move from the mid-$60,000 range.
$BTC is trading near $78,650 and remains well above all four exponential moving averages on the daily chart.
The 20-day EMA stands near $71,865, the 200-day EMA near $71,974, while the 50-day and 100-day EMAs sit around $68,147 and $68,057, respectively. See below.
$BTC/USD 1-day price chart. Source: TradingView.
The distance between price and the moving averages shows how quickly $BTC moved higher during the August breakout.
The $71,800-$72,000 area now forms the closest major EMA cluster if the current pullback develops into a deeper correction, while the 50-day and 100-day averages create another technical area around $68,000.
Momentum is considerably more stretched. The daily Relative Strength Index is at 78.67, above the conventional 70 overbought threshold, after surging from around 50 during the breakout.
The reading does not by itself confirm that Bitcoin has reached a top, but it leaves the price more exposed to profit-taking while RSI remains at elevated levels.
MACD continues to favour buyers, with the MACD line around 4,030 compared with the signal line near 2,820 and the histogram still positive at roughly 1,210.
$BTC/USD 1-day price chart. Source: TradingView.
However, the latest histogram bars have started to contract after the initial surge, showing that bullish momentum is losing some strength even though a bearish crossover has not formed.
Volume profile data places a large concentration of previous trading activity around the mid-$60,000 to upper-$60,000 range, including a prominent high-volume area close to $67,500.
Bitcoin moved quickly through the thinner volume area above that region during its August breakout, leaving less historical trading activity between the current price and the previous consolidation zone.
Meanwhile, the 24-hour liquidation heatmap adds much tighter levels for the next move.
A dense pool of liquidation leverage sits around $79,200-$79,500, with further liquidity extending towards $80,000-$80,500.
Bitcoin 24-hour liquidation heatmap. Source: Coinglass.
A move through the first cluster could therefore bring the $80,000 level back into play, before $BTC again faces the $81,000-$83,000 resistance zone that stopped the latest rally.
Below the market, another concentrated liquidation area sits around $77,900-$78,100. $BTC has already traded close to that zone during the latest decline, while additional liquidity is distributed through roughly $77,000-$77,700.
A sustained break below the lower cluster would put $75,000 back in focus, a level that also carries the largest call open interest heading into Friday's options expiry.
Below it, the daily EMA structure places the next major technical area around $71,800-$72,000, followed by the high-volume region around $67,500-$68,000.
For the bullish case, $BTC first needs to recover to $79,200-$80,000 before another attempt at $81,000-$83,000.
The daily MACD remains positive, and price is still above all four tracked EMAs, but the RSI reading near 79 and a slowing MACD histogram leave the rally vulnerable to further consolidation or another pullback if buyers cannot reclaim the overhead resistance.