- BTC reverses its previous resistance level to support.
- Traders remain cautious as BTC reaches new price levels.
Bitcoin [BTC] has recently experienced a breakout, pushing the price to a new range important for its future trajectory. When the price reached critical levels, traders who had previously taken short positions faced a setback.
Bitcoin is moving towards the $46,000 price zone
Analysis of Bitcoin on a daily time frame showed that it has struggled to surpass its short-term moving average (yellow line) since it fell below it around January 14. The yellow line previously acted as support, but switched to resistance once the price trend dropped below it.
Recently, BTC has shown positive trends, successfully breaking above the yellow line and transforming it back to a support level around $44,300.
Source: trading view
A notable move occurred on January 8, when the price rose to $45,000, surpassing levels that BTC had rarely reached in recent months.
At the time of writing, Bitcoin was trading up almost 2% and had broken into the $46,000 price range. The strength of this move was clearly reflected in the Relative Strength Index (RSI), which trended towards the oversold zone.
Short positions in Bitcoin are taking hits
Analysis of the Bitcoin liquidation chart on Coinglass showed that the recent price surge had impacted short traders.
Since February 7, short positions have seen significant liquidations as the price rose. At the close of trading on February 7, short liquidation volume was over $33 million, contrasting with about $5 million for long positions.
Source: Coinglass
The trend continued on February 8, with the volume of short liquidations reaching over $34 million, while long positions registered around $4 million. At the time of writing, the liquidation of short positions had already exceeded $12 million.
Open Interest has shown a slight increase
Analysis of Bitcoin open interest on Mint glass showed a recent increase in cash inflows, evident in the slight increase in BTC open interest on January 8. The metric recorded around $19 billion, marking the first time in weeks that Bitcoin open interest rose to this level.
At the time of writing this had risen to over $20 billion, yet another new level. Despite the modest increase, traders appeared cautious, as the funding rates chart indicated.
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While the funding rate has remained positive, there has been no significant movement recently. However, the state of the financing rate indicates that buyers are still in control.
If Bitcoin can maintain this new price range, it could be a starting point for higher price levels.