In the ever-evolving world of cryptocurrency, Bitcoin continues to capture the attention of analysts and investors alike. While the digital asset currently displays a bullish breakout on larger timeframes, a subtle yet significant short-term bearish divergence is beginning to emerge. This divergence could indicate a shift in momentum, with potential major liquidity building below the current price, hinting at a possible long squeeze scenario.
Analyzing the Four-Day Bitcoin Chart
Renowned analyst Josh from Crypto World has been closely monitoring the four-day Bitcoin chart. He notes that there has been minimal change over the past 24 hours. Despite the Super Trend indicator remaining in the red, a confirmed breakout followed by a candle close above approximately $71,500 could see it flip to green. On a more optimistic note, the three-day chart has already transitioned to green, suggesting a more positive outlook for Bitcoin’s price trajectory.
Nevertheless, Josh emphasizes that as long as Bitcoin maintains a position above the $66,000 threshold, the overall price structure leans more towards a bullish stance, despite any short-term pullbacks that may occur.
Short-Term Price Structure
Bitcoin’s ability to hold above a previous resistance level is a favorable indicator for its larger price structure. It’s important to recognize that a long-term bullish trend can still experience short-term pullbacks, just as a bearish trend can witness brief rallies. Currently, while larger timeframes suggest a bullish outlook, smaller timeframes are exhibiting bearish tendencies.
The cryptocurrency is testing a previous resistance zone, which could now serve as support, ranging from approximately $66,700 to $68,300. If this area holds, it would bolster the bullish sentiment. Conversely, should Bitcoin dip below $66,700, further support is anticipated around $65,500 to $66,000, with additional support levels between $64,200 and $64,500.
On the upside, resistance levels to watch for potential upward movement include local highs near $69,500 and significant resistance at around $72,000 and $73,500, which correspond to historical all-time highs.
Understanding the Long Squeeze
The Bitcoin liquidation heat map provides crucial insights, revealing that liquidity is accumulating to the downside between $66,400 and $66,500. With a surge in new long positions, a drop below $66,400 could trigger a liquidation event, potentially resulting in a long squeeze. This scenario underscores the importance of closely monitoring price levels and market sentiment to make informed investment decisions.
In conclusion, while Bitcoin’s current larger timeframe trends present a bullish outlook, emerging short-term bearish signals warrant caution. Investors and traders should remain vigilant, keeping a close eye on key support and resistance levels as well as market sentiment to navigate the dynamic landscape of cryptocurrency trading effectively.
