Bitcoin surpassed the $46,000 mark on February 9, reaching a peak of nearly $47,600, following the SEC approval of multiple Bitcoin exchange-traded fund (ETF) products. This milestone marks a 5% increase in Bitcoin’s value over the last 24 hours.
The investment influx into BTC ETFs, including BlackRock’s IBIT, is expected to boost Bitcoin’s market value. Its price movement could mirror historical patterns that suggest further growth, especially after halving events.
Bitcoin has managed to move back up its horizontal resistance of $46,500. With a larger amount of short liquidations, does it have the strength to continue going up?
Bitcoin traders have experienced a high volume of liquidations. Notably, most Bitcoin liquidations came from traders betting on a price decline, with $102.15 million liquidated from short positions from February 7, when the price of Bitcoin started rising. The biggest single liquidation order was a $5.1 million short position on Bitcoin executed through the BitMEX platform.
Conversely, long position traders have been fairly small, especially compared to the previous period. This could indicate that the current price rise is accelerated by the derivatives market. Therefore, we could call it a short squeeze.
Bitcoin price has been in an uptrend since November 21, 2022, when it fell to a low of around $15,000. On January 11, 2024, it peaked at $49,000, marking an increase of over 200%. There was a strong indication that this uptrend ended, so we have been anticipating a corrective phase.
The price dipped below $39,000 on January 23 but quickly bounced back and is now in an upward trajectory, sitting at $47,400. This rise threatens the bearish outlook, in which we could see a more extensive correction, as the first significant bull market one that can bring the price down to $31,000 or even $29,000 area.
If the price continues to climb, that would mean that the uptrend from November 21, 2022, still hasn’t ended, and there is one more high before it fully finishes. However, the horizontal zone around $46,500 was strong in the past and still might hold. The current daily candle is already above its previous high daily close, and it’s only a wick to $49,000. This is why we need to wait for today’s candle to close, as it could end as a wick.
The daily chart RSI has started interacting with the overbought zone at 73%. Even though this suggests the price is starting to become overextended, we can see it still has more room to go before it starts pointing at the potential top.
In all, Bitcoin should start its first bull market correction, and we have been anticipating it after its $49,000 peak. This is still in play, but today’s rise could mean that the price will still be one higher before this correction starts.
The upside potential is limited, but the price could easily rise to the $51,800 area. This would represent an increase of 9% from current levels.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.