Bitcoin (BTC) has a major new price target to hit — and it’s closer than it sounds.
Come observed by Philip Swift, co-founder of the Decentrader trading suite, $25,000 has become a critical price level for BTC.
Bitcoin Price Rally Nears ‘Lots of Liquidity’
In January, after gaining 40%, Bitcoin continues to consolidate around $23,000.
Opinions differ as to what happens nextor — after more than a year of bear markets, many investors are expecting a drastic correction and even new multi-year lows at $12,000 or worse.
Others believe that the positive period can continue and that BTC/USD can even reach $30,000 before starting a recovery phase.
In the meantime though, some focus on another dividing line much closer to the current spot price.
Per Swift, the area around $25,000 has become particularly significant. In a tweet on January 24, she pointed out that this is where the bears begin to be liquidated en masse.
It is also where the 200-week moving average (WMA) sits, a key trend line absent since mid-2022 when it failed to act as support. Bitcoin has since spent a record amount of time below the WMA 200, currently at around $24,750.
“There is plenty of liquidity between $24,700 and $25,900, in line with the 200WMA and the area just above it”Swift commented.
Analyzing a liquidity chart shows that Leveraged short positions will start liquidating once BTC/USD clears $23,400 — so far, this is where the rally has run into momentum issues.
“This level continues to act as resistance”, he wrote Rekt Capital, trader and analyst, in part of his commentary on the matter, pointing out that Bitcoin’s latest weekly close was also lower.
“BTC needs to reclaim the support at ~$23400 to move higher, otherwise there is a risk of a new Lower High forming related to the summer 2022 highs.”
Such a scenario would mean that BTC/USD is unable to clear August local highswhich marked a brief lull during a 77% drop from all-time highs in November 2021.
The highs of August 2022 keep the bulls in check
Continuing, Rekt Capital drew attention to the fact that the summer highs also represent a resistance zone on longer timeframes.
Analyzing the monthly graph in his latest YouTube update, he underlined the need to break through this resistance, which is “reconfirming”.
“If this were to hold, then we could be preparing for a decline precisely to reconfirm this level as support”claimed, referring to the lows of the monthly intervalwhich Bitcoin lost thanks to the FTX debacle.
A short-term forecast suggests that “a sustained consolidation could occur before breaking either side of the range.”
Rekt Capital added that a drop below the low of the range is not ruled out, however.
The views, thoughts and opinions expressed herein are those of the authors only and do not necessarily reflect or represent the views and opinions of Cointelegraph.
