Bitcoin is currently retesting a crucial area on the chart after a dramatic shift that wiped out billions of dollars in short positions. According to analyst Josh of Crypto World, this development coincides with a major bullish signal that continues to flash on Bitcoin’s chart. Recent price action shows a breakout above the resistance at $64.2K-$64.9K, which is now being retested as support.
This retesting comes on the heels of a short squeeze, wiping out billions of dollars in short positions. Historically, Bitcoin tends to move towards high liquidity areas, and recent action has cleared much of the liquidity between $65,000-$65,500. The next major liquidity levels are around $66,500 and $67,500, with some minor liquidity at $62,000.
In other news, on Tuesday, spot Bitcoin ETFs saw a massive inflow of over $422 million, with BlackRock contributing $260 million. This shows high investor demand, prompting other providers like Fidelity and ARK to also purchase Bitcoin.
Discussing the Bitcoin charts on both the 3-day and 4-day timeframes, he observed a little change over the last day. However, there was a development in the drop in the US Dollar Index (DXY), which typically has an inverse correlation with Bitcoin. When the DXY trends bearish, Bitcoin often trends bullish, and vice versa. While no indicator is 100% right, this correlation holds true over 90% of the time.
Despite a slight pullback in Bitcoin’s price, the overall trend and momentum remain bullish. Key resistances at $60,000-$61,000 and $63,000-$64,000 were broken and are now acting as new support levels. Currently, Bitcoin is retesting these levels, potentially confirming them as support.
If Bitcoin confirms a bounce from this retested support, the next resistance levels to watch are $67,000-$68,000, based on historical resistance and the volume profile indicator. A breakout above $68,000 could pave the way towards new all-time highs, with the final resistance between $72,000-$74,000.
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