Bitcoin price must take $26K, trader says after ‘textbook short squeeze’

Bitcoin (BTC) rebounded off three-month lows on Sept. 12 as traders voiced suspicion over BTC price behavior.

BTC/USD 1-hour chart. Source: TradingView

Bitcoin shorts feel heat as BTC price adds $1,000

Data from Cointelegraph Markets Pro and TradingView followed a snap return to levels seen after the weekly close on BTC/USD.

Bitcoin had seen immediate weakness on the previous day’s Wall Street open, briefly dipping below $25,000 to cap its worst performance since mid-June.

The subsequent comeback took the largest cryptocurrency $1,000 higher, but at the time of writing, $26,000 still acted as resistance.

Ahead of time, on-chain monitoring resource Material Indicators warned that BTC price would soon face a “support test” thanks to bid liquidity further down the order book being removed.

#FireCharts shows 2 large #BTC Buy Walls have been rugged. Support test is inbound. pic.twitter.com/QnKIEoAnEc

— Material Indicators (@MI_Algos) September 11, 2023

In further preemptive analysis, Material Indicators and others noted that previous support “rug pulls” had ultimately produced Bitcoin market upside instead, with large-volume traders clearing liquidity from immediately around spot price.

Continuing, co-founder Keith Alan predicted that $24,750 would hold as support on the down move, something which at the time of writing holds true.

After the recovery, which he called a “textbook short squeeze,” popular trader Skew was among those calling for bulls to overcome $26,000 resistance.

$BTC CVDs & Price
Very clean perp CVD divergence with sellers failing to break below $25K

Setup criteria
> high short float in OI & negative funding
> Price reclaiming price level / failing to sustain LTF trend lower (Looks like SFP below initial low)
> Perp CVD divergence… pic.twitter.com/rsRLzAUbkE

— Skew Δ (@52kskew) September 12, 2023

“$25.6K – $25.3K still important for structure & confirmation of buyers,” Skew added.

Data from monitoring resource CoinGlass showed total BTC short liquidations at just over $12 million for Sept. 12 so far, while $71 million in BTC longs suffered the day prior.

BTC liquidations chart (screenshot). Source: CoinGlass

Bitcoin price: “Next impulse” incoming?

Optimistic as ever, meanwhile, fellow popular trader Credible Crypto eyed a Bitcoin market cap dominance breakout as a potential precursor to the next bullish BTC price move.

Related: Double top ‘likely’ confirmed — 5 things to know in Bitcoin this week

In fresh X analysis on Sept. 12, he flagged a local dominance downtrend being tested — something which last occurred in mid-June and sparked over $7,000 in gains over two weeks.

“Five days after BTC dominance broke its local downtrend, price followed suit with the next impulsive leg which was a $7,000 move,” part of accompanying comments read.

“With bullish market structure intact on BTC, 24.8k held, and BTC dominance breaking out, I think there is a decent argument to be made that our next impulse is just around the corner.”Bitcoin dominance vs. BTC/USD annotated chart. Source: Credible Crypto/X

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

cointelegraph.com

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