This $25K BTC price target would spell misery for Bitcoin shorters

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Bit­coin (BTC) has an impor­tant new price tar­get for bulls to meet — and it is clos­er than it seems.

As not­ed by Philip Swift, co-founder of trad­ing suite Decen­trad­er, $25,000 is now a crit­i­cal BTC price level.

Bitcoin price rally near “a lot of liquidity”

After putting in 40% gains in Jan­u­ary, Bit­coin con­tin­ues to con­sol­i­date around the $23,000.

Opin­ions are split as to what will hap­pen next — after more than a year of bear mar­ket, plen­ty of mar­ket par­tic­i­pants expect a dra­mat­ic cor­rec­tion and even new mul­ti-year lows of $12,000 or worse.

Oth­ers believe that the good times can con­tin­ue and even see BTC/USD reach $30,000 before check­ing its relief rally.

In the mean­time, how­ev­er, some are focused on anoth­er line in the sand much clos­er to cur­rent spot price. 

For Swift, the area around $25,000 is now espe­cial­ly sig­nif­i­cant. This, he not­ed in a tweet on Jan. 24, is where bears begin to get liq­ui­dat­ed en masse.

It is also the site of Bitcoin’s 200-week mov­ing aver­age (WMA), a key trend line which has been absent from the chart since the mid­dle of 2022, when it failed to act as sup­port. Bit­coin has since spent a record amount of time below the 200WMA, which cur­rent­ly sits at around $24,750.

“There is a lot of liq­uid­i­ty from $24,700 — $25,900 which lines up with the 200WMA and the area just above it,” Swift commented.

BTC/USD liq­uid­i­ty chart (screen­shot). Source: Decentrader

Analy­sis of an accom­pa­ny­ing liq­uid­i­ty chart shows that lever­aged short posi­tions will start see­ing liq­ui­da­tions once BTC/USD pass­es $23,400 — so far, this is exact­ly where the ral­ly has encoun­tered momen­tum problems.

“This lev­el con­tin­ues to act as resis­tance,” trad­er and ana­lyst Rekt Cap­i­tal wrote in part of com­men­tary about the top­ic, not­ing that Bitcoin’s lat­est week­ly close was also lower.

“BTC needs to reclaim this ~$23400 as sup­port to move high­er, oth­er­wise there is a risk of a new Low­er High form­ing rel­a­tive to the Sum­mer 2022 highs.”

Such a sce­nario would mean BTC/USD fails to crack its local highs from August, these in them­selves mark­ing brief respite in the 77% draw­down from the all-time highs seen in Novem­ber 2021.

BTC/USD anno­tat­ed chart. Source: Rekt Capital/ Twitter

August 2022 highs keep bulls in check

Con­tin­u­ing, Rekt Cap­i­tal drew atten­tion to the fact that the sum­mer highs also present a resis­tance zone on longer timeframes.

Relat­ed: Bit­coin price stays near $23K as data shows hodlers not sell­ing BTC

Ana­lyz­ing the month­ly chart in his lat­est YouTube update, he under­scored the need to break through that resis­tance, which is still “reaf­firm­ing itself.”

“If this con­tin­ues to be the case, then we could set our­selves up for a dip just to reaf­firm this lev­el as sup­port,” he argued, refer­ring to the month­ly range lows, which Bit­coin lost thanks to the FTX debacle.

A short-term pre­dic­tion sug­gest­ed that “some con­sol­i­da­tion could take place for as long as it needs to take place before there is a break to either side of the range.”

A trip below the range low, Rekt Cap­i­tal added, was nonethe­less not out of the question.

BTC/USD anno­tat­ed chart. Source: Rekt Capital/ Twitter

The views, thoughts and opin­ions expressed here are the authors’ alone and do not nec­es­sar­i­ly reflect or rep­re­sent the views and opin­ions of Cointelegraph. 



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