Bitcoin has surprised everyone once again. Last week, things seemed very bearish for risk assets as the Russian invasion started, followed by a massive collapse of the global markets and Bitcoin.
The price of Bitcoin fell rapidly, even dropping below the $36,000 level. However, the demand arrived and the price was quickly pushed back above the mentioned support and rallied to the $45,000 area.
Technical Analysis
Long-term: The Daily Chart
The 50-day moving average was impulsively broken to the upside on the daily time frame. The price is currently struggling with the 100-day moving average and amid the $45K area, and if it can break through these levels, the next significant resistance would be the $50K area.
On the other hand, if the price is rejected at the current level, the 50-day moving average could act as the first and most likely level of support.
Short-term: The 4-Hour
Looking at the 4-hour time frame, price action appears more straightforward: The price was pushed above the $36K support, making the bearish leg a fake breakout.
After a few days of struggling to break above the $40,000 mark, massive demand arrived and the price broke above the $40,000 level, creating giant bullish green 4-hour candles, reaching the $45,000 resistance zone. at the time of writing.
Currently, bulls seem to be in total control. However, a short-term correction appears to be imminent as RSI ‘screams’ that bitcoin is over-bought on the short-term timeframe.
The $40,000 resistance, which has now turned into support, as well as the 50-day moving average mentioned in the previous paragraph, would be substantial support areas that would most likely turn into a higher low in the event of a correction.
Onchain Analysis
There have been $94 million in short position liquidations in the previous two days after the break of $39K, and the price follows up the higher trading zone ($40.8K – $44.4K).
The aggressive bears sold off from the previous breakout of $37.1,000, and the market is currently trading between $44,000 and $45,000.
For the last two weeks, funding rates have mainly stayed negative, with price absorbing selling liquidity in this range. As many investors who bet on the selling trend have been squeezed out of positions, they have shifted their focus to buying.
These liquidations are necessary for the market to moderate the leverage used in derivatives.
