Bitcoin broke through $66,000 this morning under the push of a short squeeze, testing the previous high at the end of September. At the same time, the DeFi liquidation volume reached the second highest level in three months, and the inflow of stablecoins into exchanges indicated a bullish signal. However, there is still a significant amount of sell orders above the September high, and Bitcoin has not clearly broken through the downward trend. Market volatility is expected to continue, and downward pressure may be faced.
Summary:
Bitcoin surged to $66,500 and Ethereum rose above $2,600 in the morning, while the Dow Jones and S&P 500 hit new highs.
Background:
“Bitcoin won’t rise if Trump wins?” Chief Financial Adviser: He won’t let the US dollar depreciate…
Table of Contents:
Significant liquidation driving force
Improved market sentiment
Increase in stablecoin deposits on exchanges
Resistance still exists
In the early morning today, Bitcoin once again broke through $66,000, reaching a high of $66,500, testing the previous high at the end of September. After briefly breaking through the downward channel trendline, the market is closely watching whether the upward trend can continue to break through the resistance level or if there will be another pullback.
Bitcoin breaking through the downward channel trendline. Source: Cointelegraph
Bitcoin rose by 6.9% within 8 hours this time, and one major driving force was the liquidation of short positions. According to a report by CoinGlass yesterday, if Bitcoin breaks through $65,000, mainstream centralized exchanges will liquidate $396 million worth of short positions. According to Coinglass data, the crypto market experienced over $240 million in liquidations in the past 24 hours, with short positions accounting for $208 million. This is also reflected in the surge in funding rates.
Surge in funding rates
In addition, according to data from Santiment, during this rebound, Bitcoin’s DeFi liquidation volume reached the second highest level in over three months. This is noteworthy because the last time such a large-scale liquidation occurred, Bitcoin experienced a 20-day, +29% price increase. If history repeats itself, this could be a strong bullish signal indicating further price increases.
Bitcoin’s DeFi liquidation volume reached the second highest level in over three months.
With Bitcoin temporarily surging above $66,000, Santiment stated in a post early this morning that investors are looking for opportunities in the GameFi and memecoin sectors. They believe that historically, this is a sign of improved market sentiment.
In this context, many traders are betting on the possibility of Bitcoin breaking through the $70,000 mark. JJ, the head of cryptocurrency options and derivatives at HighStrike, stated:
The inflow of stablecoins on exchanges also shows positive signs. According to a Santiment article, the inflow of USDT into exchanges has slightly rebounded, and the inflow of stablecoins into exchanges is usually an important driving force for the market to continue to rebound. It is recommended to continue monitoring this trend.
Looking ahead to the future of Bitcoin, JJ warned that there is still resistance above the September high due to a significant amount of sell orders on the Coinbase order book. He further pointed out:
In addition, Bitcoin’s performance in the fourth quarter is estimated to be influenced by macroeconomic factors such as the US presidential election and the Federal Reserve’s interest rate cuts, which is worth continuous attention.
Related reports:
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