Bitcoin is currently experiencing a bullish divergence, with an important multi-billion dollar liquidation event potentially on the edge. The Bitcoin chart indicates a struggle around the $63,000 to $64,000 resistance area in the short term, according to analyst Josh of Crypto World. However, a breakout above this level could lead to a major short squeeze, potentially pushing Bitcoin’s price higher.
The Bitcoin chart also reveals that Bitcoin remains in a bull market, as hinted by the super trend indicator which has stayed green since the beginning of 2023. This stands in contrast to the previous bear market during most of 2022, when the indicator was red.
A bearish trend reversal would require a confirmed candle close below approximately $55.8k on the 4-day timeframe, which has not occurred. Historically, brief dips below this level have been followed by recoveries, as seen in August of last year and March 2023.
The analyst also stressed that while Bitcoin remains in a larger bullish trend, short-term bearish trends or pullbacks can occur. The daily Bitcoin chart shows the DXY (US Dollar Index) looking bearish, which is typically bullish for Bitcoin.
Despite this breakout, Bitcoin faces critical resistance levels between $63,000 and $64,000, and further resistance between $67,000 and $68,000, and $72,000 and $74,000. The analyst suggested that a short-term rejection at these levels could form an inverse head and shoulders pattern, leading to a potential breakout toward all-time highs if confirmed.
The analyst noted a bullish divergence on the daily Bitcoin chart, predicting short-term bullish relief or sideways price action. To confirm a new bullish trend, additional signals such as a significant pullback in the DXY or a breakout above key resistance are needed. Recently, Bitcoin broke above a resistance area for the first time in over a month, signaling a bullish reversal.
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