Bitcoin (BTC) has a major new price target for bulls to hit – and it’s closer than it looks.
As noted by Philip Swift, co-founder of trading suite Decentrader, $25,000 is now a critical BTC price level.
Bitcoin Price Rally Near “Lots of Liquidity”
After a 40% gain in January, Bitcoin continues to consolidate around $23,000.
Opinion is divided on what will happen next – after more than a year of bear market, many market participants expect a dramatic correction and even new multi-year lows of $12,000 or worse.
Others believe the good times can continue and even see BTC/USD reach $30,000 before checking the relief rally.
In the meantime, however, some are focusing on another line in the sand much closer to the current spot price.
For Swift, the $25,000 area is particularly important right now. This, he noted in a tweet on Jan. 24, is where bears are beginning to liquidate en masse.
It is also the site of Bitcoin’s 200-week moving average (WMA), a key trendline that has been off the chart since mid-2022, when it was not acting as support. Bitcoin has since spent a record time below the 200WMA, which is currently hovering around $24,750.
“There is a lot of liquidity at $24,700 – $25,900, which is consistent with the 200WMA and the area just above it,” Swift noted.
Analysis of an accompanying liquidity chart shows that leveraged short positions will begin to see liquidations once BTC/USD crosses $23,400 – so far this is exactly where the rally has run into momentum issues.
“This level continues to act as resistance,” says trader and analyst Rekt Capital wrote as part of commentary on the topic, noting that Bitcoin’s latest weekly close was also lower.
“BTC needs to reclaim this ~$23400 as support to move higher or it risks forming another Lower High from Summer 2022 highs.”
Such a scenario would mean that BTC/USD fails to break its local highs from August, which in itself marks a brief hiatus in the 77% record of all-time highs in November 2021.
August 2022 Highs Keep Bulls in Check
Moving on, Rekt Capital drew attention to the fact that the summer highs also form a resistance zone on longer time frames.
Related: Bitcoin Price Remains Near $23,000 as Data Shows Hodlers Not Selling BTC
Analyzing the monthly chart in his latest YouTube update, he underlined the need to break through that resistance, which continues to “reaffirm itself.”
“If this continues, we can prepare for a dip to reaffirm this level as support,” he argued, referring to the monthly lows Bitcoin lost thanks to the FTX debacle.
A short-term forecast suggested that “some consolidation could take place as long as it takes before there is a break on either side of the range”.
A trip below the range low, Rekt Capital added, was nevertheless not ruled out.
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