• Bitcoin price broke above $22,500 to new highs above $25,000 amidst short liquidations of over $155 million.
• Bitfinex analysts suggest that this could be indicative of a bottom in the bear market.
• The surge was fueled by massive liquidations and BTC may retreat back below $24,000 in the week ahead.
Bitcoin Price Breaks Above $25K
Bitcoin’s price rose above the key psychological and technical level of $25k briefly before slipping back under it. This significant increase came as a result of short liquidations amounting to over $155 million and has caught out many bullish speculators who were expecting a push to upper-$25k levels or higher.
Potential Indication of Market Bottom
Bitfinex analysts suggest this could be indicative of a bottom forming in what has been an extremely gruesome bear market for Bitcoin. Furthermore, the surge was primarily fuelled by these mass liquidations as well as profit-taking in response to the recent rally.
Retreat from Upper-$25K Levels Likely
The analysts at Bitfinex also believe that it is likely that BTC will retreat from these upper-$25k levels once again due to stop-runs occurring on those who had gotten overly aggressive chasing the upside. This could potentially send Bitcoin prices back down below the key psychological level of $24,000 in the upcoming weeks ahead.
Historical Price Action Patterns Suggest Range Movement Ahead
This type of action which sees both longs and shorts wiped out simultaneously has historically resulted in ranged price movement following such events. As such, it is likely that we will see ranged movements rather than any sustained trends emerging over the next few weeks or months while Bitcoin continues its journey through what appears to be its final stages of this bear market cycle.
Conclusion
Overall, Bitcoin’s break above the key psychological mark of $25k seems to have been fueled by massive liquidations and is potentially indicative of a bottom forming in what has been an extremely long bear market for cryptocurrencies worldwide. However, there is still potential for BTC prices to fall back below $24k again before any sustained uptrends can take hold so traders should remain cautious going forward into 2021 and beyond!
