Bitcoin’s Bullish Surge Leads to $145 Million Liquidations: Will BTC Price Reach $50,000 in January?
The first day of 2024 was a strong one, with Bitcoin price surging 8%. Surprisingly, this surge did not have a significant impact on the cryptocurrency’s short positions, with only $38 million in Bitcoin short positions initially liquidated. But later, an unexpected price surge led to a dramatic change, with more than $110 million of the total $145 million liquidated from shorts.
Analysts note that early short positions do not appear to be ready for Bitcoin to rally beyond $45,000, which could potentially lead to further upside around this price level, especially when spot market activity could impact perpetual swap transactions. It suggests volatility.
Bitcoin Liquidation Heat Map: Bearish and Bullish Trends
The market saw liquidation of $145 million, mainly from short positions. Traders who had bet on a market reversal at the start of the year were overwhelmed by the unexpected bullish momentum. This strong Bitcoin price action signals a continuation of the bullish momentum and sets a strong tone for the year ahead. Crossing the $45,000 threshold will improve market sentiment and reinforce the ongoing bullish market trend. The impending approval of a spot Bitcoin ETF in the coming weeks adds weight to the market’s positive outlook.
Prepare for potential volatility after ETF approval
While optimism prevails in the markets, investors should be prepared for potential volatility, especially following the ETF’s approval. Often called a “news selling” event, this phenomenon can trigger a price decline after an initial rise fueled by anticipation. Traders take advantage of these events by locking in profits and influencing asset prices after the event.
Bitcoin riding the wave of strength. Is it possible to achieve 500,000 won?
Bitcoin’s price trajectory shows a clear upward trend, most notably the breakout of the $45,000 resistance level, which currently serves as support. Overcoming this significant hurdle means strength for Bitcoin. The moving averages are indicating a strong bullish pattern, with the price comfortably above both the 50-day and 200-day moving averages, indicating a strong upward trend. The 50-day moving average primarily acts as dynamic support and confirms continued bullish pressure.
Moreover, as seen in the volume bar, increased trading activity around the breakout point reinforces this surge momentum. The Relative Strength Index rising to overbought levels shows strong buying pressure accompanying the recent price surge.
For BTC to maintain this upward momentum, it will need to break above the resistance level of $45,539. If successful, it could rally further to test the $47,000 resistance level, setting the stage for a potential push towards $50,000 soon.
Conversely, a reversal in the trend could result in a loss of momentum, leading BTC to test the support level at $44,334. If bearish sentiment strengthens, there could be further declines within the week to test lower support levels at $42,019.