The leading cryptocurrency, Bitcoin (BTC), has been trading between $60,000 and $72,000 for over two months. Now, bullish indicators suggest BTC could revisit the range’s top after more than a month of trading at its support.
Notably, Bitcoin entered the current range on February 28 in a remarkable bull rally before reaching its previous all-time high. As developed, BTC made new highs at $73,805 in the first deviation from the range in mid-March. Later, another deviation happened on May 1—this time, downwards.
The maiden cryptocurrency briefly lost momentum in early April and started a downtrend that ended with the mentioned deviation. Since then, BTC has traded below its 30-day exponential moving average (30-EMA), and Bitcoin short-sellers have dominated a bearish market. Should Bitcoin break out from its 30-EMA, currently at $63,360, it could seek the range highs at $72,000.
Short squeeze alert for Bitcoin
Interestingly, derivatives data from CoinGlass on May 11 further validate a short-term forecast of $72,000 for Bitcoin. On that note, the one-month liquidation leverage heatmap shows two meaningful liquidity pools upwards due to increased open interest for short positions against BTC during this bearish last month.
In particular, the $67,000 and $71,000 are key levels with billions of dollars in short liquidations. If the sentiment changes for Bitcoin, these could become easy targets, potentially triggering two short-squeeze events that would drive the price to hit $72,000.
This sentiment shift could happen in May, as bullish divergences started surging for all cryptocurrencies, signaling an incoming trend reversal. Recently, Jack Dorsey sent a letter to Block Inc’s (NYSE: SQ) shareholders making a stand for Bitcoin.
In conclusion, the popular digital asset could be getting ready for an 18% rally from $61,000 to $72,000. However, trading BTC is an uncertain activity, and it is impossible to predict Bitcoin’s price movements accurately.
Investors must remain cautious and avoid high exposure despite the growing optimism in the space as India reopened its market to offshore crypto exchanges.
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