With a notable bounce, Bitcoin has regained its upside traction once again, surging beyond key resistance levels as it aims to revisit its peak. While several key factors could be responsible for the recent upward move in BTC’s price, one factor seems to stand out the most among all.
What’s Behind The Bitcoin Renewed Upswing
Bitcoin has witnessed downside pressure since reaching a new all-time high in May this year. However, BTC’s price has recently made an electric comeback, rising above the crucial $105,000 level in a stunning display of power on Monday.
Following the renewed upward performance by BTC, Glassnode, a leading financial and on-chain analytics platform, has underscored the major trigger behind the sharp rally. According to the on-chain platform, the sudden upswing is likely driven by a wave of short positions liquidations.
Following weeks of ambiguity and price fluctuations that shook investor confidence, the flagship cryptocurrency has rekindled optimism among investors about further gains. As traders who bet against BTC’s upside potential were forced to cover their positions, a surge of buy orders swept over the market, which appears to have caused prices to spike higher.
This abrupt action from Bitcoin not only highlights how erratic the asset may be but also suggests that the market mood may change as bulls or buyers gain ground. Furthermore, it marks a turning point in BTC’s path, increasing the potential for the flagship asset to reclaim its all-time high and even beyond.
Data from the on-chain platform shows that the total short liquidations of the 24-hour Simple Moving Average (24H SMA) increased from $105,000 to $359,000 in just 4 hours. Prior to the upward move, Bitcoin’s funding rates turned negative, which pointed to a rise in short appetite. However, as of Monday, those short bets from investors were observed being squeezed.
A Solid Cluster Of Liquidity Ahead For BTC
In an X (formerly Twitter) post, Daan Crypto Trades, a technical expert and trader, has shed more light on Bitcoin’s recent liquidation heat map, particularly on the largest cryptocurrency exchange, Binance.
After examining the liquidation heat map on the monthly time frame, the expert highlighted that the chart’s narrative is consistent with other charts that show significant liquidity clusters aligning well with critical levels. Nonetheless, the expert believes that below the $100,000 mark and Thursday’s low are areas where things can pick up speed, and the current correction could occur.
Meanwhile, above the $112,000 level and into new all-time highs is where Bitcoin’s price would find a strong cluster of liquidity from shorts that had amassed during this time. Also, Daan Crypto Trades noted that a lot of stops are likely to be placed above the point.
Featured image from Getty Images, chart from Tradingview.com
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