Bitcoin Hit a Record High. Here's What Might Happen Next

• Bitcoin fell by 3.2% in the 30 minutes after it surged above $69,000.
• Historical cycles show that a conclusive all-time high breakout is often followed by a sustained period of upside price action.
• More than $84 million of derivatives have been liquidated in the past four hours, the majority of which have been long positions.

Bitcoin BTC$91,962.06 rose to a record $69,325, topping its previous peak set in November 2021, on a flurry of volatility buoyed by demand from spot exchange-traded funds (ETFs) in the U.S. Unlike the previous cycle, the largest cryptocurrency by market value almost instantly fell back as bearish traders wrangled for control.

Bitcoin dropped 3.2% in 30 minutes and at press time was trading at $66,100. The CoinDesk 20 Index, a measure of the broader crypto market, lost 1.8% in the hour after BTC hit its high.

Historically, when bitcoin breaks an all-time high, prices tend to rally for the next few days: In 2020, it rose to $24,200 from $20,000 in a 48-hour period. It didn't drop below $20,000 again until June 2022, in the midst of a bear market. In March 2017, bitcoin hit a high of $1,350 before dropping to $897 over the following two weeks. Then it started a run to an eventual high of $20,000.

Today's immediate response indicates that bitcoin doesn't have the momentum required to emulate the rise in 2020. Significant sell orders have been added at $70,000 and $71,000 on Binance, contributing to the stalemate.

More than $84 million worth of derivatives positions have been liquidated in the past four hours, the majority of those have been long positions. That ties into the overwhelmingly positive funding rates of the past few days. A positive funding rate indicates that perpetuals are trading at a premium to the spot price and requires traders holding long positions to pay a fee to those holding short positions, a cost they may be inclined to bear.

Bitcoin appears to suffered a rejection from the $69,000 region, meaning it is likely to gravitate back to a previous level of support such as $64,000 or even $61,000 before making another attempt to conclusively break the $69,000 mark.

In 2020, it took bitcoin more than three weeks to finally crack $20,000. It suffered multiple rejections, dropping to as low as $16,250 amid rising volatility before it eventually broke through. It's likely that bitcoin will enter a range-bound period before taking aim at another break-out attempt.

UPDATE (March 5, 16:15 UTC): Adds CoinDesk 20 Index in second paragraph.