Bitcoin eyes the $71k level as the $65,735 support holds

Bitcoin has been underperforming over the last 24 hours, down by more than 1% since Wednesday. 

The leading cryptocurrency dipped towards the lower consolidation range at $65,759 at the time of writing on Thursday, but the bulls have successfully defended this level.

Wednesday’s hawkish Federal Open Market Committee (FOMC) Minutes, alongside rising geopolitical tension between the US and Iran, dampened risk appetite and pressured risky assets.

Furthermore, institutional demand for Bitcoin has declined so far this week, adding more pressure to the coin. 

BTC retested the $65,735 support level

Bitcoin successfully retested the $65,735 support level earlier today after losing more than 1% of its value.

However, it has now rebounded and is trading above $66,600. 

The bearish performance comes as the Minutes from the FOMC’s January meeting showed on Wednesday that policymakers were deeply divided over the possibility and timing of further rate cuts. 

The Minutes showed that several Fed officials believed that more rate cuts could be warranted if inflation declines as expected.

However, others were cautious that easing too early could compromise the central bank’s 2% inflation target.

The less dovish Minutes dampened the market appetite, putting pressure on Bitcoin and the broader cryptocurrency market. 

In addition to that, the rising tension between the United States and Iran is affecting the global financial markets. 

According to CBS, the US military is ready for possible strikes on Iran as soon as Saturday.

However, President Trump has yet to make a final decision on whether to carry out an attack.

Per the report, the USS Abraham Lincoln aircraft carrier group and its flotilla of warships are already in the region.

Furthermore, the USS Gerald Ford, a second carrier group, is en route to the Middle East.

The final pressure on Bitcoin comes from the weakening institutional demand.

Official data shows that spot ETFs recorded an outflow of $133.27 million on Wednesday, marking the second consecutive day of withdrawals this week. 

If the outflows continue and intensify, Bitcoin could see further correction in the near term. 

Bitcoin eyes $71k if the $65,735 support level holds

The BTC/USD 4-hour chart is bearish despite the bulls defending the $65,735 support zone.

The leading cryptocurrency has been consolidating within a range between $65,729 and $71,746 since February 7.

BTC is down 2.67% so far this week and, as of Thursday, is trading around $66,600.

If the daily candle closes below the $65,735 support level, BTC could extend the decline toward the key support level at $60,000.

The Relative Strength Index (RSI) on the 4-hour chart reads 43, below the neutral level of 50 and pointing downward toward the oversold levels.

This indicates that the bearish momentum is gaining traction. 

However, the Moving Average Convergence Divergence (MACD) showed a bullish crossover on Sunday on the daily chart, which remains in place, suggesting that upside bias has not been invalidated yet.

If the bulls regain control and BTC’s daily candle breaks above the upper consolidation range at $71,746, the coin could extend the recovery toward the daily resistance at $73,072.