Bitcoin’s recent price surge to $71,000 could face challenges, as liquidity appears thin above this level and strong clusters sit below. Analysts remain cautious about a possible retreat following this liquidity sweep.
Market Analysis
Bitcoin (<BTC>) activity prompted short liquidations on Tuesday as investors reacted to US President Trump’s remarks regarding the Iran situation.
Key Insights:
- Increased liquidity in the Bitcoin order book accompanies its recovery to $71,000.
- The market forecasts a liquidity grab toward $72,000 next.
- BTC’s momentum remains strong, driven by ETF inflows and rising trading volume.
BTC/USD Hourly Chart
BTC/USD 1-hour chart. Source: Cointelegraph/ TradingView
Batting above $70,000 has led to the liquidation of approximately $186 million in short positions. As traders pile up orders around this pivotal range, a shake-up could arise in the coming sessions.
Anticipating the Next Moves
Data indicates $70,000–$72,000 holds thinner liquidity that might be swiftly absorbed, while deeper clusters beneath $64,000–$68,000 suggest a probable decline after tapping $72,000.
“Bulls just applied the pressure.”
Bitcoin 24-hour liquidation heatmap
Bitcoin 24-hour liquidation heatmap. Source: CoinGlass
Further observations reveal a significant liquidation pressure zone forming between $74,000 and $75,000 on the weekly charts.
Bitcoin weekly liquidation heatmap
Bitcoin weekly liquidation heatmap. Source: CoinGlass
Recovery Indicators
The Bitcoin momentum has strengthened over the past week, with the 14-day relative strength index (RSI) rising to 52, indicating improved market momentum and increasing buyer activity. Trading volumes have also surged to $9.3 billion, reflecting a 140% increase from previous sessions.
BTC 24-hour spot volume
BTC 24-hour spot volume. Source: Glassnode
Spot ETF engagements have shown remarkable resilience, with the week’s net inflows hitting $934 million.
This insight signifies sustained institutional interest in Bitcoin, pushing the cryptocurrency’s ascent forward.
As noted by analyst CW8900, there are positive signals of buying demand across exchanges.
