The Bitcoin market is at a critical juncture, with potential implications for both bullish and bearish traders. As Bitcoin investor and Forbes 30 Under 30 honoree Eljaboom points out, a major liquidation event is looming. If Bitcoin hits a new all-time high (ATH), $9.26 billion in shorts could be liquidated. A few key indicators underline this potential for spectacular price increases.
The funding rate has decreased, indicating an increase in short positions. Additionally, Coinbase Premium turned positive, suggesting increased spot demand.
As reported in the Rekt Capital newsletter, Bitcoin faced resistance at around $73,000. Most recently, resistance emerged at around $71,500, increasing selling pressure. Sellers are eager to dump their holdings at lower levels during rallies, thereby putting downward pressure on prices.
Additionally, the support level around $67,200 has weakened. This level provided strong support in early March, triggering a strong rebound. However, by the end of May, its effectiveness had diminished, no longer able to offer the same degree of support. As a result, Bitcoin’s weekly closing price fell below this critical level. If Bitcoin attempts to recover from its current prices, the $67,200 level could move from weak support to a new rejection point.
Historically, a weekly close below a significant support level has often become a new resistance point. The current scenario suggests that a similar transition may be underway. According to data from On-Chain College analysts, Bitcoin is approaching a critical support level, currently at $63,800. The market is closely monitoring whether this level will hold, potentially leading to new ATHs, or whether it will break, ushering in a period of volatility and uncertainty.
At press time, Bitcoin was trading at $65,714.43, down 0.55% over the past 24 hours, with a 24-hour trading volume of $36,088,051,208.
