Bitcoin reached $70,000 during the Wednesday session in New York, while bulls focused on selling liquidity.
Key points:
The price support for Bitcoin must remain above a key trend line at $68,000 for the rally to continue.
$80,000 is a key level to watch, as it is the next major liquidation cluster above.
Inflows into spot Bitcoin ETFs attracted $500 million on Wednesday.
Hourly chart of the $BTC/USD pair. Source: Cointelegraph/TradingView
Bitcoin must close the week above $68,000
TradingView data showed the $BTC/USD pair at $68,480 on Bitstamp. This is just above the 200-week exponential moving average (EMA), which is currently at $68,338.
Analyst Rekt Capital noted that Bitcoin was facing resistance at this trend line and stated that the latest recovery could become a "new test of the EMA after breaking into new resistance," based on historical price evolution.
"The moment of truth for Bitcoin is approaching," said Rekt Capital, adding:
“Bitcoin will need a weekly close above the EMA and convert it into new support to go against historical trends.”
Weekly chart of the $BTC/USD pair. Source: Rekt Capital
Expanding the picture, his fellow analyst Jelle stated that the price must convert the 50 EMA (at $68,000) on the four-hour chart to support to confirm the recovery.
Four-hour chart of the $BTC/USD pair. Source: Jelle
As reported by Cointelegraph, the $BTC/USD pair could rise to $74,508, where sellers are likely to intervene, if bulls break the 20-day EMA, currently at $69,220.
Will liquidations drive the price of $BTC to $80,000?
Several traders anticipate a potential liquidity grab; a group of sell orders is positioned above $72,000.
The latest data from the tracking resource CoinGlass shows that the price of $BTC is leveraging liquidity around $70,000, and most of the interest is still clustered above the spot price.
There are around $2 billion in sell orders placed between $72,450 and $75,000.
Bitcoin liquidation heat map (screenshot). Source: CoinGlass
If the $75,000 level breaks, it could trigger a liquidity contraction, forcing short sellers to close positions and driving prices towards $80,000, which is the next major liquidity group.
"The search for Bitcoin liquidity has only just begun," said analyst AlphaBTC in his latest post on X, adding:
“Unless there is a catalyst that triggers a drop, I expect these higher levels to be reached in the coming weeks.”
The inflows into spot Bitcoin ETFs support the rise of $BTC
Institutional demand shows signs of recovery, with inflows into U.S.-based spot Bitcoin ETFs for two consecutive days, according to data from Farside Investors.
Investors poured a total of $765 million into these investment products on Tuesday and Wednesday, with $507 million flowing into the funds on Wednesday, the largest amount since February 2.
Table of flows of spot Bitcoin ETFs. Source: Farside Investors
"Inflows into ETFs and short position liquidations are doing the heavy lifting," said X user Raster in a recent post, adding:
“This is not about retail FOMO, but about institutional accumulation with a technical breakout.”
This growing pressure from demand could push prices of $BTC upwards, especially if combined with increasing adoption and whale accumulation.
-DAN PENTAGRAM