Bitcoin (BTC) has a major new price target for bulls, and it’s closer than meets the eye.
What points Philip Swift, co-founder of Decentrader, $25,000 is now a critical price level for BTC.
Bitcoin Price Rally Rises to Levels Near “Plenty of Liquidity”
After posting 40% gains in January, Bitcoin continues to consolidate around $23,000.
Opinions are divided as to what happens next: After more than a year of bear market, many market participants are expecting a drastic correction and even new multi-year lows below $12,000 or worse.
Others believe that the good times may continue and may even see the BTC/USD pair reach 30,000 before checking its relief rally.
In the meantime, however, some are focusing on another line in the sand much closer to the current spot price.
For Swift, the area around $25,000 is now especially significant. As she pointed out in a tweet on January 24, this is where bassists begin to be liquidated en masse.
It is also the site of Bitcoin’s 200-week moving average (WMA), a key trend line that has been absent from the chart since mid-2022, when it did not act as support. Since then, Bitcoin has spent a record amount of time below the 200-week WMA, which currently sits at around $24,750.
“There is a lot of liquidity between $24,700 and $25,900, which is in line with the 200-week WMA and the area just above it,” Swift said.
Analysis of an accompanying liquidity chart shows that leveraged shorts will begin to see liquidations once the BTC/USD pair breaks above the $23,400 mark – so far, this is exactly where the rally has encountered momentum problems.
“This level continues to act as resistance”, wrote trader and analyst Rekt Capital in part of the comments on the subject, noting that the last weekly close for Bitcoin was also lower.
“BTC needs to recapture this ~$23,400 for support to keep going higher, otherwise there is a risk of a new lower high relative to the summer 2022 highs.”
Such a scenario would mean that the BTC/USD pair fails to break its local August highs, which themselves mark a brief respite in the 77% drop from the all-time highs seen in November 2021.
August 2022 highs keep bulls at bay
Continuing, Rekt Capital drew attention to the fact that the summer highs also present a resistance zone on longer time frames.
Analyzing the monthly chart in his latest YouTube update, he stressed the need to break that resistance, which continues to “firm itself.”
“If this continues to be the case, then we could prepare for a drop just to reaffirm this level as support,” he argued, referring to the monthly lows of the range, which Bitcoin lost thanks to the FTX debacle.
A short-term prediction suggested that “some consolidation could take place for as long as it takes before there is a breakout to both sides of the range.”
However, Rekt Capital adds that a drop below the bottom of the range is not ruled out.
The views, thoughts and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.