Bitcoin (BTC) bulls are back in control, with the king of crypto decisively crossing the $60,000 psychological resistance level. This double-digit surge in the past week has fueled speculation of a retest of its all-time high (ATH) in the near future. However, analysts warn of potential roadblocks that could prevent a sustained climb.
Rally or Retest? The $72,300 Question
CoinMarketCap data confirms Bitcoin’s impressive run, with a 12% price increase over the past week and a 4% jump in the last 24 hours. As of writing, BTC sits comfortably above $62,500, boasting a market capitalization exceeding $1.23 trillion.
Popular crypto analyst Ali sheds light on a crucial factor that could hinder further gains. According to his tweet, a staggering $5.60 billion in short positions would be liquidated if Bitcoin breaches $72,300. This massive short squeeze could lead to a sharp price correction, potentially causing BTC to “slow down or plummet” after reaching its ATH.
Technical Indicators: A Mixed Bag
To assess potential hurdles before the $72,300 mark. An analysis of CryptoQuant’s data revealed a rise in Bitcoin’s exchange reserve, indicating increasing selling pressure. Additionally, a red aSORP value suggests more investors are cashing out on profits, which can be a sign of a market peak during a bull run.
Further analysis exposes investor sentiment. The NULP metric indicates a belief phase, suggesting holders are confident about their unrealized profits. This can be a double-edged sword, as it might lead to complacency and selling once profits reach a desired level.
The Fear and Greed Index currently sits at 69%, firmly in “fear” territory. This metric often precedes price corrections, hinting at a potential pullback before a continued ascent.
Conflicting Signals: Buy the Dip or Brace for Impact?
Despite the cautionary signs, a glimmer of hope emerges from the Rainbow Chart, a technical indicator suggesting a “BUY” zone for Bitcoin. This implies there might be some room for further accumulation before the next upswing.
Similarly, the RSI (Relative Strength Index) remains bullish, indicating strong momentum. However, the declining Chaikin Money Flow (CMF) points towards a potential correction before the next leg up.
Bitcoin’s recent surge is undeniable, and a retest of its ATH seems like a realistic possibility. However, investors should be wary of the looming short squeeze at $72,300 and the mixed technical signals. While the “BUY” signal on the Rainbow Chart offers some optimism, potential short-term corrections shouldn’t be ignored. Closely monitoring market sentiment and key technical indicators will be crucial for navigating Bitcoin’s path in the coming days and weeks.
Also Read: Mt. Gox on the Move: $2.7 Billion in Bitcoin Transferred, Repayments to Creditors Looms
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
