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Bitcoin () has an important new price target for bulls to meet — and it is closer than it seems.
As noted by Philip Swift, co-founder of trading suite Decentrader, $25,000 is now a critical BTC price level.
Bitcoin price rally near "a lot of liquidity"
After putting in 40% gains in January, Bitcoin continues to consolidate around the $23,000.
Opinions are split as to what will happen next — after more than a year of bear market, plenty of market participants expect a dramatic correction and even new multi-year lows of $12,000 or worse.
Others believe that the good times can continue and even see BTC/USD reach $30,000 before checking its relief rally.
Meanwhile, however, some are concentrating on another line in the sand much closer to the current spot rate.
For Swift, the region around $25,000 has become particularly important. He remarked in a tweet on January 24 that this is where bears begin to be massively liquidated.
There is also the website of Bitcoin 200 weeks average mobile (wma), a key trend line missing in the graph since mid-2022, when he was not supportive. Bitcoin has since spent a record amount of time below the 200WMA, which currently sits at around $24,750.
"There is plenty of cash of $24,700 - $25,900 that corresponds to the 200WMA and the area just above it," Swift commented.
Analysis of an accompanying liquidity chart shows that leveraged short positions will start seeing liquidations once BTC/USD passes $23,400 — so far, this is exactly where the rally has encountered momentum problems.
“This level continues to act as resistance,” trader and analyst Rekt Capital wrote in part of commentary about the topic, noting that Bitcoin’s latest weekly close was also lower.
“BTC needs to reclaim this ~$23400 as support to move higher, otherwise there is a risk of a new Lower High forming relative to the Summer 2022 highs.”
Such a scenario would mean that BTC/USD does not succeed in breaking through its highest offices as of August, On their own, they provide a brief respite from the 77 per cent decline from historic highs seen in November 2021.
August 2022 highs keep bulls in check
Continuing, Rekt Capital drew attention to the fact that the summer highs also present a resistance zone on longer timeframes.
Related: Bitcoin price stays near $23K as data shows hodlers not selling BTC
Analyzing the monthly chart in his latest YouTube update, he underscored the need to break through that resistance, which is still "reaffirming itself."
"If it remains so, then we could prepare for a fair decline to reassert that level of support,' he said, refer to monthly band bottoms, that Bitcoin lost through the breakup of the FTX.
According to a short-term prediction, 'some consolidation may take place as long as needed before there is a break on each side of the range."
A journey below the low end, added Rekt Capital, was not out of the question.
