As Bitcoin’s price experiences notable fluctuations, the market is abuzz with speculation: will Bitcoin reclaim the $95K mark before March concludes? Recent metrics, including a favorable CPI report, suggest a bullish outlook for the leading cryptocurrency. Various analysts weigh in on the current market structure and trading behaviors overarching Bitcoin, providing crucial insights into its price movements.
Since the end of January, Bitcoin has endured significant drawdowns but recently managed a 3% rebound, rising above the $80,000 threshold after dipping below it earlier in the month. This turn of events comes after the US core Consumer Price Index (CPI) registered a lower-than-expected rate of 3.1%. The negative news surrounding inflation appears to have provided the necessary momentum for Bitcoin to shift its market dynamics favorably, thereby increasing the probability of a bullish turnaround.
Bitcoin’s price has shown strong activity between the $84,000 and $85,000 marks, serving as critical overhead resistance. Following its recent drop on March 9, BTC has tested this resistance level three times, leading many traders to build short positions aggressively. A liquidation heatmap indicates that over $300 million in short positions could trigger mass liquidations if Bitcoin’s price surpasses the $85,000 resistance zone.
Moreover, the absence of significant liquidity below $77,000 suggests that Bitcoin has a much higher potential to move upwards, especially if it can clear the $85,000 resistance. Another factor contributing to this bullish sentiment is the presence of an unfilled CME Bitcoin futures gap between $85,000 and $86,000. Historically, 100% of similar gaps have been filled within four months, increasing the likelihood that Bitcoin could convert $85,000 from resistance to support.
Should the cryptocurrency surpass the $85,000 barrier, the next major resistance lies at $90,000, where liquidations worth more than $1.6 billion in short positions could occur. This significant uptick presents an opportunity for Bitcoin to eye the $95,000 resistance level, representing a potential 12% increase from current prices. Analysts like Mark Cullen indicate a cautious yet optimistic view – though Bitcoin’s trajectory currently appears ‘corrective,’ sideways movement might precede the much-anticipated short squeeze.
Conversely, other voices in the trading community, such as Valeria, express caution, highlighting potential short-term bearish signs over the $85,000 range. She suggested that BTC might dip below $80,000 before any forthcoming bullish reversal may materialize, indicating a complex trading terrain heading into the latter half of March.
Part of the trading complexity is reflected in the actions of major exchanges. Binance has observed significant selling activity among spot traders, particularly around recent lows, while Coinbase traders have actively defended the price at strategic levels. On March 12, trader behavior mirrored a similar divide, with Binance selling near the resistance point and Coinbase bids keeping prices afloat. This divergence could potentially impede Bitcoin’s momentum unless both exchanges align in their trading strategies.
To navigate these factors, traders should remain vigilant of market trends and be prepared for rapid price movements. Bitcoin’s ability to breach resistance levels hinges on the underlying trading dynamics between exchanges and the broader market sentiment. While the potential for substantial gains is evident, the risk remains, urging investors to proceed with caution and conduct thorough research.
