Bitcoin (BTC), the leading cryptocurrency, has been trading between $60,000 and $72,000 for over two months. Currently, bullish indicators suggest that Bitcoin could re-approach the top of the range after trading at support for more than a month.
Notably, Bitcoin entered its current range on February 28th during an impressive bull run before reaching its all-time high. During the development, BTC hit a new high of $73,805 in its first deviation from the mid-March range. Then, on May 1st, another deviation occurred, this time to the downside.
The maiden cryptocurrency briefly lost momentum in early April and began a downward trend that ended with the aforementioned deviation. Since then, BTC has been trading below its 30-day exponential moving average (30-EMA), with Bitcoin short sellers dominating the bear market.
If Bitcoin breaks out of the 30-EMA, currently at $63,360, it could head towards the top of the range at $72,000.
Bitcoin (BTC) short squeeze alert to $72,000
Interestingly, the data derived from coin glass The May 11th announcement further validated Bitcoin’s short-term prediction of $72,000.
In that regard, the 1-month Liquidation Leverage Heatmap shows that two meaningful liquidity pools are on the upswing as the open interest of short positions against BTC has increased during this bearish last month.
In particular, $67,000 and $71,000 are key levels where billions of dollars of short-term liquidations occur. If sentiment towards Bitcoin changes, these could become easy targets and trigger two short squeeze events that take the price to $72,000.
This change in sentiment is likely to occur in May as bullish divergences begin to surge across all cryptocurrencies, suggesting a trend reversal is coming. Recently, Jack Dorsey sent a letter to Block, Inc. (NYSE:SQ) shareholders expressing his support for Bitcoin.
In conclusion, the popular digital asset could be poised for an 18% rally from $61,000 to $72,000. However, trading BTC is an uncertain activity, and it is impossible to accurately predict Bitcoin price movements.
Despite the optimism in the sector after India reopened its market to offshore crypto exchanges, investors need to remain cautious and avoid high exposure.
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