Bitcoin Bounces Right Where Recent Buyers Break Even

• Bitcoin defended its 200-day EMA after dropping to its lowest level since mid-September.
• The record Binance hack hurt ETF flows more than it hurt the price.
• Short-term holders are back near their average purchase price and selling at a loss.
• A daily close above the 0.236 Fibonacci level would be the first recovery signal.

Bitcoin is trading near $78,500 on Wednesday, up about 1.2% on the day. Earlier in the session it fell to $75,700, briefly dropping below its 200-day exponential moving average (EMA) at $76,480 and almost exactly matching the average purchase price of short-term holders. The rebound comes six days after Binance disclosed a $6.3 billion theft, the largest in crypto history, while US spot Bitcoin ETFs are still seeing redemptions. If the daily candle closes near current levels, it will leave a long lower wick, which shows buyers are defending this area.

The Binance hack hit sentiment harder than price

Binance said on October 29 that an attacker had used a compromised laptop to access a service container and submit unauthorized withdrawals, with the estimated impact at around $6.3 billion. Blockchain intelligence firm TRM Labs linked the attack to North Korean hackers. Tether and Circle froze stablecoins tied to the stolen funds, and the exchange said about $3 billion in assets had been identified and frozen. Bitcoin fell as much as 5% as the news spread, which on the chart shows up as the large red daily candle at the end of October.

For a theft that size, the damage to the price has been limited. Binance pledged to cover the losses from its Secure Asset Fund for Users, its futures insurance fund and its corporate treasury. On November 1 it resumed withdrawals for 15 assets, including Bitcoin, and processed roughly $4.6 billion of them within hours without a disorderly run on the exchange. The US and Israeli campaign against Iran that began on February 28 caused a similar first-day drop, but the selling lasted much longer, with Bitcoin sliding below $64,000 and extending a months-long downtrend across crypto. A war feeds into oil prices and rate expectations for weeks, whereas the hack hit one company’s balance sheet and left the Bitcoin network itself untouched.

ETFs bled close to $500 million in 13 sessions

US spot Bitcoin ETFs recorded a net outflow of $116 million on November 3, their third consecutive day of redemptions, according to Farside Investors data. Across the 13 trading sessions from October 16 to November 3, the funds took in $1.52 billion on seven inflow days and lost $2.01 billion on six outflow days, leaving a net outflow of about $498 million. The last three sessions alone account for $1.16 billion of redemptions, and the heaviest of them, October 30, came the day after the hack.

BlackRock’s IBIT still ended the period with a net inflow of about $171 million, while Fidelity’s FBTC and ARK’s ARKB lost roughly $280 million and $229 million. The US funds still hold a cumulative $56.5 billion in net inflows since launch, so recent redemptions look small next to that total.

Short-term holders slip back to breakeven

Many of the coins now sitting near breakeven were bought during the high-volume breakout of September 21, when BTC ran to $87,378 before the rally stalled. Through October the price made a series of lower highs and ground down through the 0.618 and 0.5 Fibonacci retracement levels of that range. Trading volume during the slide was a fraction of the September breakout, which usually means buyers have stepped back while sellers push only lightly.

On-chain data show the same thin demand. On-chain analyst Axel Adler Jr tracks the market value to realized value ratio of short-term holders (STH MVRV), which compares the current price with the average purchase price of coins held for less than six months. Between October 27 and November 3 it fell from 1.054 to 1.018. That leaves Bitcoin only 1.8% above this group’s average cost of $75,800, down from a 5.4% cushion a week earlier.

Short-term holders who are selling are already doing so at a loss. The seven-day average of their SOPR, which shows whether coins are being spent above or below the price they were bought at, dropped below 1 on October 30, the day after the Binance hack. It has stayed there for five consecutive days. A return above 1 would be the first on-chain sign that this selling pressure is easing, and Adler’s data show it has not happened yet.

The first hurdle

Price is now pressing against $78,456, the 0.236 Fib, which acted as support in late October and turned into resistance after the hack candle broke through it. A daily close above it would be the first sign of recovery. Above that, the 50-day EMA at $79,999 and the 0.382 Fib at $80,161 sit almost on top of each other, which makes $80,000 the main barrier. Reclaiming that zone would put $81,539 and $82,917 back in play.

Support on the downside is unusually concentrated, with the 200-day EMA, the $75,800 short-term holder cost basis and Wednesday’s $75,700 low all sitting within $800 of each other. Together with the late-October low near $76,100, they form a potential double bottom: two similar lows that suggest sellers twice failed to push the price lower. A daily close below $75,700 would cancel that setup and put the average short-term holder at a loss. It would also expose the mid-September lows around $75,000, and below that the -0.272 Fib extension near $72,500.

RSI turns up from below 50

The daily RSI sits near 43.5 and has just crossed above its signal line at 41.1. A reading under 50 means sellers have had the upper hand over the past two weeks, so the crossover is an early improvement in momentum and still falls short of a trend change. The golden cross from mid-September, when the 50-day EMA moved above the 200-day, is still technically intact, although the 50-day has started to flatten and curl lower.

What a close above $80,000 would change

A close above $78,456 followed by a reclaim of $80,000 would confirm the double bottom and give the bulls the short-term edge again, putting price back above the 50-day EMA that capped every rebound in late October. A rejection here and a loss of $75,700 would extend the October downtrend instead. Over the next few sessions, two readings will show whether demand is returning: the short-term holder SOPR moving back above 1, and an end to the three-day run of ETF redemptions in Farside’s November 4 data. Binance has already covered about 95% of the stolen amount from its own reserves, so any recovery of the roughly $3 billion in frozen assets would go toward rebuilding the safety fund it drained to protect users.