Bitcoin Price Forecast: BTC retests breakout zone as risk-on sentiment supports upside potential

• Bitcoin price is retesting the key breakout level near $73,400 on Wednesday, with momentum indicators supporting an upside move.
• US-listed BTC spot ETFs recorded inflows of $411.50 on Wednesday as US-Iran peace talks could resume this week.
• Analyst reports odds moving in favor of a BTC breakout, with the likelihood of short squeezes ahead.

Bitcoin (BTC) is nearing a key breakout level around $73,400 as of writing on Wednesday and, if it holds, it would suggest a bullish move ahead. The institutional demand supports the BTC price, as spot Exchange Traded Funds (ETFs) recorded inflows of over $410 million on Tuesday amid reports that the US-Iran peace talks could resume this week. Meanwhile, an analyst highlights that BTC is likely to face short squeezes ahead.

US-Iran could resume peace talks this week

Bitcoin price started the week on a positive note, extending last week’s recovery and surging to a two-month high of $76,038 on Tuesday before a slight pullback.

The price rally was supported by the news that US-Iran peace talks could resume this week. On Wednesday, US President Donald Trump said in an interview with Fox Business, “I think it’s close to over, yeah. I view it as very close to being over,” when asked about how long the war with Iran will last.

Earlier on Tuesday, Trump also said that negotiation teams from Washington and Tehran could resume talks in Pakistan in the next two days.

These positive comments from Donald Trump on a permanent truce with Iran, despite the first round of talks ending without a breakthrough over the weekend, have fuelled a risk-on mood, with the S&P 500 just inches away from its all-time highs while Bitcoin is holding above $74,000 as of writing on Wednesday.

Institutional demand supports BTC

Institutional demand shows early signs of return amid the possibility of a US-Iran peace deal. SoSoVaue data shows that Bitcoin spot ETFs recorded inflows of $411.50 million on Tuesday, after an outflow of $291.11 million the previous day. If this inflow continues throughout the week, Bitcoin could see an upward move.

A short squeeze scenario could be in play

K33 Research reported that signs of accelerating pessimism rather than continued stagnation have been seen in recent days. Funding rates on the Binance exchange for the BTC/USDT pair remained negative for 11 consecutive intervals over the weekend and have shown limited acceleration following BTC’s strong rally on Monday.

The analyst noted that while BTC price has risen, funding rates have remained negative alongside growing Open Interest. 

“This points to elevated aggression from traders entering short positions, with many betting on BTC failing to break out of its consolidation range. This tendency increases the likelihood of short squeezes ahead”, said K33 Research analyst.

The 30-day average funding rate in BTC, as shown below, has now been negative for 46 consecutive days, matching the duration of the negative funding regime from November 11 to December 26, 2022.

“We are now only four days away from surpassing the length of the negative funding regime seen in the summer of 2021. With recent funding rate compression and the unusually persistent negative regime, we see increasing odds of higher highs and a breakout from BTC’s 68-day consolidation. Comparable risk-off regimes have historically been attractive entry points for BTC”, the report concluded.

Bitcoin developers are building safeguards to protect from future quantum risks

WuBlockchain reported on Wednesday that Bitcoin developers and researchers have proposed Bitcoin Improvement Proposal (BIP) 361 to address potential vulnerabilities posed by quantum computing. The proposal suggests freezing early Bitcoin addresses — primarily P2PK addresses with publicly exposed public keys — to prevent future quantum computers from deriving private keys from public data and stealing funds.

This comes after Google Quantum AI recently released a white paper warning that, under advanced quantum scenarios, encrypted wallets could be compromised in under 10 minutes.

This highlights the growing urgency within the crypto ecosystem to proactively address quantum-related threats, as developers move toward building stronger protective safeguards.

Bitcoin Price Forecast: BTC retest key breakout level

Bitcoin is trading above $74,000 on Wednesday, after hitting a two-month high of $76,038 the previous day. BTC has broken above the upper boundary of an ascending triangle pattern (drawn by connecting highs and lows with two trendlines since early February) and holds above the 50-day Exponential Moving Average (EMA) at $71,124 after rebounding from it at the start of this week. 

The Relative Strength Index (RSI) on the daily chart hovers in the low 60s, and the Moving Average Convergence Divergence (MACD) histogram remains positive, which together suggest firm bullish momentum as long as BTC holds above the breakout point near $73,400, the upper boundary of the ascending triangle pattern.

On the downside, initial support is seen at the 50-day EMA at $71,124. A deeper pullback would expose the 23.6% Fibonacci retracement at $68,950 (drawn from the January 14 high to the February 6 low), the rising trendline support (triangle pattern) near $67,412, and ultimately the more distant horizontal floor around $62,950.

On the topside, a sustained break above the 100-day EMA at $75,273 and the nearby $75,680–$75,764 resistance cluster would open the door toward the 50% retracement at $78,962 and the psychological $80,000 mark.

(The technical analysis of this story was written with the help of an AI tool.)