A serious BTC minor liquidation is just a stone’s throw away, but Bitcoin has so far failed to defeat the resistance.
Bitcoin
BTC
Make a ticker below
$23,304
The bulls have a significant new price target to meet — and it’s even closer than it sounds.
As Philip Swift, co-founder of trading suite Decentrader, noted, $25,000 is now a significant price level for BTC.
A rise in bitcoin prices near “hyper liquidity”.
Bitcoin continues to consolidate around $23,000 after posting a 40% gain in January.
Opinions are divided on what happens next — after more than a year of a bear market, many market participants expect a dramatic correction and even a multi-year low of $12,000 or worse
Others believe the good times could continue and BTC/USD could even reach $30,000 before its relief rally checks.
But in the meantime, some are focusing on another line in the sand very close to the current spot price.
For Swift, the area around $25,000 is especially important right now. “This is where the mass liquidation of bears begins,” he said in a Jan. 24 tweet.
It is also the site of Bitcoin’s 200-Week Moving Average (WMA), a key trend line that has been absent from the charts since mid-2022, when it failed to act as support and Bitcoin has since spent record time below the 200WMA, currently priced at about $24,750 He is sitting down.
“There is a lot of liquidity at $24,700 – $25,900 that matches the 200WMA and the area above it,” Swift commented.
BTC/USD liquidity chart (screenshot). Source: Decentralized
Analysis of the accompanying liquidity chart indicates that once BTC/USD crosses $23,400, the leveraged short position will see liquidation — so far this is where the rally has faced momentum issues
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“This level is acting as resistance,” trader and analyst Rect Capital wrote in a note section on the topic, noting that bitcoin’s latest weekly close is even lower
“BTC needs to move higher as support to recover this ~$23400, or risk creating a new lower high relative to the summer 2022 high.”
Such a scenario would mean that BTC/USD fails to crack its local highs since August, which all by itself marks a brief 77% decline from the all-time highs seen in November 2021
BTC/USD Annotated Chart. Source: Rect Capital/ Twitter
The August 2022 high keeps the bulls in check
Continuing, Rect Capital draws attention to the fact that even summer highs present prolonged areas of resistance.
Related: Bitcoin price stays near $23K as data shows Hodler not selling BTC
Analyzing the monthly chart in his latest YouTube update, he emphasized the need to break through that resistance, which is still “reaffirming”.
“If that continues, we may just dip ourselves in to reaffirm this level as support,” he argued, referring to the low of the monthly range
The short-term forecast showed that “there may be some consolidation longer than needed before there is a pause on either side of the range.”
Rect Capital added that a trip below the range low is not out of the question, however.
BTC/USD Annotated Chart. Source: Rect Capital/ Twitter
The views, opinions and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
