Bitcoin [BTC] is currently facing a critical juncture, with bulls encountering resistance following a surge in September that brought prices near $65K.
As it stands at $60,480, the expected repetition of the late July trend has not materialized, with bears stepping back and bulls eyeing the next hurdle at $68K.
Although there is still bearish pressure looming, there are concerns about a potential deeper pullback; a failure by the bulls may see BTC retracing back to approximately $55K. However, a recent development has sparked hope, leading to speculation that an increase in demand could trigger a short squeeze.
Rising Confidence Among Bitcoin Whales
In the past 10 days, whale groups holding 1K to 10K BTC have shown confidence in Bitcoin’s future prospects by purchasing over 50K BTC, valued at around $3.14 billion.
Interestingly, this surge in buying occurred when Bitcoin was facing pressure from short-sellers after peaking near $63K. These purchases helped forestall a major decline, assisting BTC in its journey towards breaking the $65K barrier.
Essentially, shorts gained control in the derivatives market during the mid-September rally, putting pressure on BTC to drop. However, the accumulation by whales absorbed this pressure, leading to conditions ripe for a short squeeze.
If a similar scenario unfolds, it could trigger liquidations among short positions, potentially kickstarting a significant recovery.
Potential Risk for Short Positions
Currently, a rebound to $61K presents a considerable liquidity pool of about $40 million in leverage.
A close around this level could spell trouble for short sellers, compelling them to close their positions and causing BTC to surge upwards.
A Shift Indicating a Market Reversal
Typically, patterns of whale accumulation often coincide with Bitcoin testing a market bottom.
According to CryptoCrypto, revisiting $60K was necessary to shake off weak holders – those who bought BTC at a lower support level of $55K – pushing them to sell and exit the market cycle.
The key now is to turn the resistance at $60K into support, enticing new buyers to join the market and allowing whales to target the market bottom, propelling BTC closer to $66K.
Despite net outflows regaining dominance after a three-day increase in BTC supply, signaling a strong buy-the-dip opportunity around $60K, a more robust push is required to confirm a bullish trend.
In conclusion, should bulls seize this price level with aggressive buying and convert $60K into support, a rebound could see BTC climb to $66K once again.
Alternatively, if bearish sentiment prevails without any entity to absorb the pressure, fear may spark panic selling, enabling shorts to maintain control and possibly driving BTC back to around $55K, setting the stage for the next market reversal.