- BTC flips its previous resistance level to support.
- Traders remain cautious as BTC hits new price levels.
Bitcoin [BTC] experienced a recent breakout, pushing its price into a new range that holds significance for its future trajectory. As the price reached a critical level, traders who had previously adopted short positions faced a setback.
Bitcoin moves into the $46,000 price zone
Analysis of Bitcoin on a daily timeframe showed its struggle to surpass its short Moving Average (yellow line) since falling below it around 14th January. Previously acting as support, the yellow line switched to resistance once the price trend dipped below it.
Recently, BTC has shown positive trends, successfully breaking above the yellow line and transforming it back into a support level at around $44,300.
A notable move occurred on 8th January when the price surged into the $45,000 range, surpassing the level BTC had infrequently reached in recent months.
At the time of this writing, Bitcoin was trading with an almost 2% increase and had broken into the $46,000 price range. The strength of this move was evident in its Relative Strength Index (RSI), which was trending towards the oversold zone.
Bitcoin short positions take hits
Analysis of the Bitcoin liquidation chart on Coinglass showed that the recent price increase had impacted short-position traders.
Since 7th February, short positions have faced significant liquidations as the price increased. At the end of trading on 7th February, the short liquidation volume was over $33 million, contrasting with around $5 million for long positions.
Also, on 8th February, the trend continued, with the volume of short liquidations going over $34 million, while long positions registered around $4 million. At the time of this writing, short position liquidation was already over $12 million.
Open Interest sees a slight boost
Analysis of Bitcoin open interest on Coinglass showed a recent increase in cash inflow, evident in the slight increase in BTC open interest on 8th January. The metric registered around $19 billion, marking the first time that Bitcoin open interest rose to this level in weeks.
At the time of this writing, it had increased to over $20 billion, another new level. Despite the modest increase, traders appeared cautious, as the funding rate chart indicated.
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While the funding rate remained positive, there hasn’t been any significant movement recently. However, the state of the funding rate suggests that buyers are still in control.
If Bitcoin can sustain this new price range, it may be a launching point toward higher price levels.