Bitcoin (BTC) has a major new price target for bulls, and it’s closer than meets the eye.
What indicated Per Philip Swift, co-founder of trading suite Decentrader, $25,000 is now a critical BTC price level.
Bitcoin Price Rise Near “Plenty of Liquidity”
After making 40% gains in January, Bitcoin continues to consolidate around $23,000.
Opinions are divided as to what will happen next: After more than a year of bear market, many market participants are expecting a dramatic correction and even new multi-year lows of $12,000 or worse.
Others believe that the good times may continue and even see BTC/USD reach $30,000 before checking its relief rally.
In the meantime, however, some are focusing on another line in the sand much closer to the current spot price.
For Swift, the area around $25,000 now is especially significant. This, she pointed out in a tweet on January 24, is where bassists start to get wiped out en masse.
It is also the site of Bitcoin’s 200-week moving average (WMA), a key trend line that has been absent from the chart since mid-2022, when it did not act as support. Since then, Bitcoin has spent a record amount of time below the 200WMA, which currently sits at around $24,750.
“There is a lot of liquidity from $24,700 to $25,900 that aligns with the 200WMA and the area just above it,” Swift commented.
Analysis of a companion liquidity table shows that leveraged short positions will start to see liquidations once BTC/USD breaks above $23,400; So far, this is exactly where the rally has encountered momentum problems.
“This level continues to act as resistance”, trader and analyst Rekt Capital wrote in part of the commentary on the subject, noting that Bitcoin’s last weekly close was also lower.
“BTC needs to reclaim this ~$23400 as support to move higher, otherwise there is a risk of a new lower high forming relative to the summer 2022 highs.”
Such a scenario would mean that BTC/USD fails to break its local August highs, these in themselves marking a brief reprieve in the 77% decline from the all-time highs seen in November 2021.
August 2022 highs keep bulls in check
Continuing, Rekt Capital drew attention to the fact that the summer highs also present a resistance zone on longer terms.
Related: Bitcoin Price Holds Near $23K As Data Shows Hodlers Not Selling BTC
Analyzing the monthly chart in its last youtube updateHe stressed the need to break this resistance, which is still “reaffirmed.”
“If this continues to be the case, then we could prepare for a drop just to reaffirm this level as support,” he argued, referring to the monthly lows of the range, which Bitcoin lost thanks to the FTX debacle.
A short-term forecast suggested that “some consolidation could take place for as long as it takes before there is a breakout on either side of the range.”
However, a trip below the minimum range, Rekt Capital added, was not out of the question.
The views, thoughts and opinions expressed here are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
