After reaching new local highs recently, Bitcoin is at a turning point, pushing the market into a cautious but optimistic mood. Despite the rally, analysts and investors remain cautious, as Bitcoin has repeatedly fallen from these levels since March, leading to concerns about another potential decline.
The question on everyone’s mind is whether Bitcoin is able to break through this resistance or whether history will repeat itself.
Key data shared by a senior analyst reveals that many open positions on Binance are short positions, indicating bearish sentiment among traders. This has led to expectations of an imminent decline in the price of Bitcoin, which has increased caution in the market.
However, some analysts argue that this could be a trap for bearish investors, as the sheer number of short positions could lead to a short squeeze if Bitcoin moves higher.
Will bearish sentiment prevail, or will Bitcoin defy expectations and continue its upward momentum? Investors are closely monitoring signs that could tip the scales in favor of another rally.
Bitcoin selling pressure
Bitcoin is entering a make-or-break phase that will disappoint or impress investors in the coming weeks. After a strong rally over the past two weeks, bullish sentiment is now cooling down as the price has reached a crucial resistance level, a level that had sparked a previous rejection.
Investors are on edge, wondering if Bitcoin can break through or if a major pullback is on the horizon.
Chief Analyst and Investor Ali Martinez Shared master data on XIt revealed that 58.23% of all Bitcoin trades on Binance are short, indicating bearish sentiment.
Many traders expect Bitcoin to face rejection from the $70,000 level and are anticipating a bounce, hoping to buy at lower prices. However, there is growing speculation that this bearish outlook may be a trap.
Historically, Bitcoin has a habit of moving quickly, often without giving investors time to react. A sharp rise may surprise those waiting for a decline, especially if the price crosses the $70,000 level. If this happens, bearish positions can trigger a short squeeze, driving up the price and leaving latecomers scrambling to enter the market.
With such strong opposing views, the coming weeks will determine the course of Bitcoin, leaving no middle ground to hesitate. Investors should prepare for volatility.
Critical supply demand test
Bitcoin is currently testing the most important supply level of this cycle, a pivotal moment in determining the strength of the upcoming rally. Since October 10, the price has followed a clear upward trend, but is now starting to slow down around the $68,000 level.
A break above the $68,300 level is essential for the bulls to maintain momentum. Failure to break this resistance may change the bullish structure and increase volatility.
If Bitcoin succeeds in rising above $68,300, it will reinforce the bullish narrative and set a target towards the previous all-time highs of around $73,000. However, profit-taking and market fears could trigger a pullback, pushing the price to lower demand levels near $63,000.
Traders and analysts are watching these key levels closely, as the upcoming price action will greatly impact sentiment and potential future gains. The next few days will be crucial in determining whether Bitcoin is able to maintain its upward trajectory or face a corrective phase.
Featured image by Dall-E, chart from TradingView
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