Bitcoin (BTC), the world’s largest cryptocurrency by market cap, appears to be recovering after its price hit a monthly low of $55,500. Over the past few days, the BTC price has dropped by more than 10%, but over the past three days, it has risen by more than 5%, which can be considered a sign of a price reversal.
Bitcoin Price Reversal
The recent price surge has seen BTC break out of a descending trendline and is now moving towards a strong resistance level of $58,000.
At the time of going to press, BTC is trading around the $56,740 level and has experienced a price increase of over 4.5% in the past 24 hours. Meanwhile, interest from traders and investors has skyrocketed as the trading volume has increased by 86% in the same period.
Bitcoin Technical Analysis
According to expert technical analysis, BTC appears bullish despite trading below the 200 Exponential Moving Average (EMA) on both four-hour and daily timeframes. Moreover, the price surge occurred after the formation of a bullish divergence on its Relative Strength Index (RSI) on a daily timeframe.
Based on historical price momentum, there is a high probability that BTC price will surge another 10% to the $62,000 level in the coming days.
Bullish On-Chain Metrics
In addition to this technical analysis, on-chain metrics also support this current bullish outlook. Coinglass’s BTC Long/Short ratio is currently around 1.095, which is a bullish signal (a value above 1 indicates bullish sentiment among traders). Additionally, BTC’s future open interest has increased by 6% in the past 24 hours and continues to rise.
Traders and investors often use this combination to build long/short positions.
Main liquidation areas
According to data from Coinglass, the main liquidation areas are currently around $55,900 on the low end and $57,000 on the high end as traders are overleveraged at these levels.
If the current bullish market remains unchanged and the BTC price reaches the $57,000 level, long positions worth almost $71 million will be liquidated. Conversely, if the sentiment changes and the price drops to the $55,900 level, long positions worth around $91.2 million will be liquidated.
This data suggests that bulls are currently in control and may liquidate further short positions in the coming days.
