Bitcoin (BTC) charged above $69,000 on Friday as US CPI data showed cooling inflation, leading traders to hope for a short-term BTC price recovery.
Key takeaways:
Traders favor a short-term BTC price relief rally, but bulls must first take out the resistance at $68,000 to $70,000.
Bitcoin market analysis forecasts a short squeeze toward $80,000 if bulls succeed in confirming the $65,000 level as support.
Bitcoin price must take out resistance at $68,000
Bitcoin attempted a breakout on Thursday but “got slammed back down at the $68K level,” said analyst Daan Crypto Trades in a Friday post on X, adding:
“That’s the area to watch if BTC wants to see another leg up at some point.”
An accompanying chart showed the BTC/USD pair consolidating within a falling wedge in the one-hour time frame.
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The pattern projected a short-term rally to $72,000 once the price breaks above the wedge’s upper trendline at $68,000.
Fellow Ted Pillows said that the “chances of a deeper correction would increase” if the $65,000-$66,000 support does not hold.
“To the upside, if Bitcoin reclaims the $70,000 level, it could rally 8%-10% really quickly.”
From a technical perspective, BTC’s price action has been forming a V-shaped recovery chart pattern on the four-hour chart, as shown below.
The BTC/USD pair is retesting a key area of resistance defined by the 20-period EMA at $67,500 and the 200-week exponential moving average (EMA) at $68,000.
Bulls need to push the price above this level to increase the chance of a rally to the pattern’s neckline at $72,000.
As Cointelegraph reported, if Bitcoin breaks $72,000, it will revive the hopes of a recovery toward the 20-day EMA at $76,000 and eventually, the 50-day simple moving average above $85,000, bringing the total gains to 26%.
Liquidation risk builds near $80,000
Exchange order-book liquidity data from CoinGlass showed Bitcoin’s price pinned below two walls of asks centered just below $75,000 and around $80,000.
“$BTC liquidations are stacking well above $72K, and around the area from $77K to $80K,” Bitcoin analyst ZordXBT said in his latest post on X.
Below the spot price, bid orders were lying down to $64,500, “where I have my limit orders placed,” the analyst said, adding:
“If the market holds itself here, it can very easily eat those liquidity bubbles.”
The chart above suggests that if the $72,000-$75,000 level is broken, it could spark a liquidation squeeze, forcing short sellers to close positions and driving prices toward $80,000, which is the next major liquidity cluster.
Zooming in, Ted Pillows highlighted significant bid clusters at $65,000 and ask orders around $68,000, saying that the price is likely to revisit these areas to wipe out the liquidity.
“I think a revisit of $65,000 and a pump to $68,000 will both happen soon.”
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