Bitcoin’s price is rising, but some technical indicators are raising eyebrows. Let’s dive into what’s happening.
Weakening Momentum?
A crypto analyst, TrendPro, noticed something interesting: Bitcoin’s price is making new highs, but a key indicator called the Relative Strength Index (RSI) isn’t keeping pace. This “bearish divergence” is similar to what happened after the 2020 Bitcoin halving. It suggests the upward momentum might be weakening. Historically, this type of divergence has led to either a price correction (a drop) or a period of sideways trading (consolidation).
Liquidation Zones: Potential for Big Moves
Looking at liquidation data, TrendPro highlighted two crucial price levels.
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Upside: If Bitcoin breaks above $110,000, a rapid rise towards $119,000–$122,000 is possible due to a wave of short liquidations (traders who bet against Bitcoin getting forced out of their positions).
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Downside: Conversely, a drop to $94,000–$96,000 could trigger a wave of long liquidations (traders who bet on Bitcoin rising getting forced out), potentially leading to a market reset.
Shakeout or Breakout? The Crossroads
TrendPro’s analysis suggests Bitcoin is at a crossroads. A temporary correction might be a healthy part of the overall bull market.
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Bullish Scenario: Holding above $106,000 and breaking $110,000 could lead to a short squeeze, pushing prices to $120,000 or more.
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Bearish (but not necessarily bad) Scenario: Failure to break higher could result in a pullback to around $95,000. This would clear out overleveraged traders and potentially create a stronger base for the next upward move. It’s a reset, not necessarily the end of the bull run.
The Bottom Line
The $110,000–$112,000 level is a key breakout zone. Breaking above it could trigger a significant price increase. If the price falls, $94,000–$96,000 is a crucial support level to watch. Despite the short-term uncertainty, the long-term bullish trend for Bitcoin remains intact, according to this analysis.