Bitcoin has broken through a critical resistance level that had been preventing it from reaching its full upside potential.
Bitcoin is Making a Comeback
Bitcoin appears to be on the verge of a rally.
Doubters have attempted to short the asset in recent weeks, but prices have risen. According to Bybt data, more than $180 million in short positions have been liquidated in the last few hours. The break of the $41,000 level appears to have resulted in a short squeeze, pushing BTC higher.
Although there are a few technical reasons to be bearish in the medium term, the short term outlook is positive.
Bitcoin has reclaimed the 100-day moving average as support and set a new high. These developments indicate that BTC now has the necessary buying pressure to reach the 200-day moving average at $45,000 and advance further.
The descending triangle from which Bitcoin broke out on July 26 predicts that the recent rally will continue to $47,600. This outcome would be determined by the ability of the leading cryptocurrency to move above the 200-day moving average.
Although the technicals indicate that the 200-day moving average may act as significant resistance on the way up, the transaction history indicates that there are no significant supply barriers ahead. The only interest area that may absorb some of the recent buying pressure is between $42,650 and $43,900.
Nearly 30,000 addresses have previously purchased over 350,000 BTC at this level.
It’s possible that investors in this price range will try to break even on their underwatered positions, stifling Bitcoin’s uptrend. Nonetheless, another increase in buy orders around current price levels that allows BTC to break through this barrier may be all that is required to realize its upside potential.
It is worth noting that now that the $40,000 level has been converted to support, it will almost certainly play an important role in Bitcoin’s upward trend. A sudden surge in profit-taking that pushes BTC below this demand barrier could result in a steep correction.
Below $40,000, the most significant support levels are $35,000 and $29,500.