- Bitcoin reached a local high of $57.1k, and might extend higher
- The late, high-leverage bullish speculators might be punished soon.
Bitcoin [BTC] broke out past the twelve-day range that it had established as bullish euphoria soaked the crypto markets. News that MicroStrategy had acquired another 3000 BTC reinforced the bullish conviction.
Combined with the massive capital inflows into Bitcoin ETFs, the recent breakout has some serious momentum behind it.
Ali Martinez, a prominent crypto analyst, posted on X (formerly Twitter) that the $57.1k is a significant pocket of resistance. This has come to pass in recent hours, but the strength of the 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 that Bitcoin has traded within since the 17th of February. It stretched from $50.6k to $52.5k. The recent surge saw an H4 candle close above the range highs and continue to the $57.1k level.
The RSI and the OBV saw a huge move upward. The RSI showed overbought conditions and the OBV reflected heavy 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: Coinalyze
The Open Interest and the spot CVD soared higher during the rally. Interestingly, the Open Interest had been muted from the 23rd of February to the 26th. The speculators showed frenzied activity as BTC raced above the $51.8k mark.
Meanwhile, the spot CVD has steadily trended higher in the past five days. It accelerated during the breakout and has not stopped. Therefore, it appeared that there was more room for gains.
Source: Hyblock
Yet, there were legitimate concerns that the market might be overheated on the lower timeframes. AMBCrypto’s analysis of the Liquidation Levels showed that the Cumulative Liq Levels Delta was massively green.
It showed a reading of +22.45 billion at press time, which meant the long liquidations far outweighed the short ones. In turn, this meant that Bitcoin would tend to retrace southward over the next couple of days to force these positions to close.
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The $55.5k, $53.5k, and $52.4k levels were estimated to have around $300 million in long liquidations.
The former two were high-leverage bulls. Hence, a revisit of the $53.5k level shortly appeared very likely. A drop to the $52.4k level would be a retest of the former range highs and would offer a buying opportunity as well.