- Bitcoin hit a local high of $57.1k, and could rise further
- The late, bullish, highly indebted speculators could soon be punished.
Bitcoin [BTC] broke out past the twelve-day range it had reached as bullish euphoria soaked the crypto markets. News that MicroStrategy had acquired another 3000 BTC reinforced the bullish belief.
Combined with the massive capital inflow into Bitcoin ETFs, the recent breakout has created some serious momentum.
Ali Martineza prominent crypto analyst, posted on X (formerly Twitter) that the $57.1k is a significant resistance point. This happened in the last few hours, but the strength of this move was a surprise.
Source: Ali on X (formerly Twitter)
The range has been blown wide open
Source: BTC/USDT on TradingView
Highlighted in purple was a range within which Bitcoin has been trading since February 17. It stretched from $50.6k to $52.5k. The recent rise saw an H4 candle close above the range highs and advance to the $57.1k level.
The RSI and the OBV saw a huge increase. The RSI showed an overbought situation and the OBV reflected high buying volume. The higher timeframe chart showed that the next significant resistance level was at the $59k level.
Was the rally driven by the futures markets?
Source: Coinalyse
Open Interest and spot CVD moved higher during the rally. Interestingly, Open Interest was muted from February 23 to 26. The speculators showed frenzied activity as BTC soared above the $51.8k mark.
Meanwhile, spot CVD has moved steadily higher over the past five days. It accelerated during the outbreak and has not stopped. So it seemed like there was more room for gains.
Source: Hyblok
Still, there were legitimate concerns that the market could overheat in the shorter periods. AMBCrypto’s analysis of liquidation levels showed that the Cumulative Liq Levels Delta was extremely green.
At the time of writing, the balance stood at +22.45 billion, which meant that long liquidations were much larger than short liquidations. This in turn meant that Bitcoin would tend to move back south in the coming days to force these positions to close.
Is your portfolio green? Check the BTC profit calculator
The $55.5k, $53.5k and $52.4k levels were estimated to have seen approximately $300 million in extended liquidations.
The first two were highly leveraged bulls. Therefore, a revision to the $53.5k level seemed very likely soon. A drop to the $52.4k level would be a retest of the previous highs in the range and would also provide a buying opportunity.