Bitcoin (BTC) has an important new price target for the bulls to hit – and it’s closer than it looks.
As Noted per Philip Swift, co-founder of trading suite Decentrader, $25,000 is now a critical BTC price level.
Bitcoin price rally close to ‘lots of cash’
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 in the bear market, many market participants are expecting a dramatic correction and even new multi-year lows of $12,000 or worse.
Others believe the good times may continue and even see BTC/USD hit $30,000 before checking out 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 particularly important. This is where, he noted in a Jan. 24 tweet, bears begin to liquidate en masse.
It is also the site of Bitcoin’s 200-week moving average (WMA), a key trendline that has been absent from the chart since the middle of 2022, when it failed to act as support. Bitcoin has since spent a record time below the 200WMA, which currently sits at around $24,750.
“There is a lot of liquidity from $24,700 to $25,900 that lines up with 200WMA and the area just above it,” Swift commented.
Analysis of an attached liquidity chart shows that leveraged short positions will start to see sell-offs once BTC/USD breaks above $23,400 – so far that’s exactly where the rally encountered momentum problems.
“This level continues to act as resistance,” trader and analyst Rekt Capital said. wrote as part of a comment on the topic, noting that Bitcoin’s last weekly close was also lower.
“BTC needs to reclaim this ~$23,400 as support to move higher, otherwise there is a risk of a new lower high from the 2022 summer highs forming.”
Such a scenario would mean BTC/USD failing to reach its local highs from August, with those in themselves marking a brief respite in the 77% decline from all-time highs seen in November 2021.
August 2022 highs keep bulls in check
Continuing, Rekt Capital drew attention to the fact that the summer highs also present a resistance zone on longer time frames.
Related: Bitcoin price remains near $23,000 as data shows hodlers not selling BTC
Analyzing the monthly chart in his latest YouTube update, he stressed the need to break this resistance, which is still “reaffirming itself”.
“If this continues to be the case, then we might be bracing for a decline just to reaffirm this level as support,” he argued, referring to the monthly lows in 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 either side of the range.”
A trip below the low end of the range, added Rekt Capital, however, was not ruled out.
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