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With Bitcoin (BTC) hitting a nearly three-month high of $66,000 on Friday, technical analyst InspoCrypto suggests the BTC futures market is at a critical juncture, with the potential for further short squeezes and the importance of maintaining support around the $64,000 level.
Divergence despite BTC’s rising trend
The analyst recently noted this in his to write that the latest data shows that the BTC/USDT price chart reached a Friday high of $66,106, reflecting bullish sentiment as the cryptocurrency continues to rise.
Over the past 24 hours, Bitcoin has seen a steady price increase, indicating optimism among investors. The True Strength Index (TSI) shows a slight divergence, indicating market indecision, but the uptrend remains intact.
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Trading volume also plays a key role in understanding market dynamics, and current figures show a volume delta of $675.457 million, indicating a higher number of buy orders than sell orders. This suggests that buyers are currently dominating the market and supporting the bullish momentum.
Notably, a significant number of short liquidations have taken place, totaling $331.24 million. This indicates that as the price of Bitcoin rises, many short positions are forced to close, causing the price to rise further. In contrast, long liquidations remain relatively low, indicating that those taking long positions have confidence in the direction of the market.
InspoCrypto’s heatmap analysis of Hyblock Capital shows a concentration of short liquidation levels around $63,000 to $64,000. This clustering indicates a probability short squeeze that could push prices up even further.
However, the analyst shows that long liquidation levels appear more spread out, reducing the risk of consecutive liquidations on the long side.
Analyst predicts further Bitcoin price rise
InspoCrypto further found that open interest (OI) in Bitcoin futures is increasing, indicating increased interest in the market and a potential build-up of significant price movement.
The heatmap shows strong concentrations of open interest around $64,000 to $65,000, suggesting that any price movement above these levels could cause volatility as traders adjust their positions.
The coverage ratio currently stands at 763.8, indicating that the longs are paying off for the shorts, adding to the bullish sentiment in the market. However, the analyst warns that a high coverage ratio also indicates a risk of long-term liquidation if the market changes unexpectedly.
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Looking ahead, InspoCrypto expects that the next 24 hours could see continued upside momentum as short positions come under pressure. However, the increased financing rates could lead to prolonged liquidations if the market slumps.
By the end of the week, InspoCrypto believes that if current buying pressure continues, Bitcoin price could reach prices around $68,000, which could be closer to the all-time high of $73,700 in March this year.
At the time of writing, BTC has seen a slight retrace from its current trading price of $65,800.
Featured image of DALL-E, chart from TradingView.com
Credit : www.newsbtc.com
