Bitcoin (BTC) saw volatile liquidity on August 22, with analysts suggesting the cryptocurrency market “looks ripe for a short squeeze.”
Key BTC Price Barriers Take Shape
According to data from Cointelegraph Markets Pro and TradingView, the BTC price has been volatile within a narrow range over the last 24 hours.
The revised US employment data and the release of the latest Federal Reserve minutes helped spark the rally in BTC/USD yesterday.
However, this was short-lived, as the price bounced back to $59,500, helping to liquidate late long positions, before rebounding again to $61,000.
According to the latest figures from monitoring resource CoinGlass, the total cryptocurrency liquidation volume over the past 24 hours at the time of writing was $124 million.
Additionally, there is increasing selling liquidity above $62,000, making that level a prime target for a resistance/support reversal.
Analyzing the current situation, popular trader Crypto Feras noted that BTC/USD has retested the area five times in the past two weeks.
The more you test, the weaker it becomes. Logically, after all this testing, the less effort it takes to flip it,” he wrote in part of a recent X post.
“If we flip it, the next one is 64.8-65k.”
Bitcoin has been stuck in a tight trading range, but market conditions have raised hopes that a solid breakout could be possible.
Vetle Lunde, senior analyst at cryptocurrency analytics firm K33 Research, noted that increasing open interest coupled with persistently low funding rates could potentially create a “short squeeze.”
“Market conditions appear favorable for a short squeeze,” he told X followers.
“BTC perps notional open interest has surged by 30,000 BTC since August 13, while funding rates have remained negative. The average weekly funding rate has seen its largest negative since March 23.”
Bitcoin Speculators Still Far From Break-Even
Moving forward, another key area for BTC price is the price realized by short-term holders, which is currently around $65,000.
Related: Bitcoin Macro Peak Expected in 2025 Despite ‘Chaotic’ March Highs
As Cointelegraph reported, this refers to the average purchase price for investors who held their coins for up to 155 days.
This level traditionally acts as support in a bull market, and the last time prices stayed below this level was in August 2023, which was a significant period of time.
“We can say that the 64K-66K area is a strong resistance level for Bitcoin,” Burakkesmeci, a contributor to on-chain analytics platform CryptoQuant, wrote in a blog post that day.
“As short-term holders close out losses and start turning them into profits, they are more likely to share their success stories. These stories have the potential to attract new investors to Bitcoin.”
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.