- BTC surpassed the $70K USD mark and reached a new high after four months, partly due to a liquidation squeeze.
- BTC is only 3.5% away from its all-time high, but it has not yet overcome the immediate obstacle.
Bitcoin [BTC] has surpassed the psychological level of $70K USD and reached a new four-month high of $71.5K USD. This growth has pushed the overall 'Upbtober' gain to 11%, marking an effective breakout from the prolonged accumulation phase since March.
What's driving the Bitcoin price increase?
A liquidation squeeze has partly fueled the surge above $70K USD. There were significant liquidity clusters (short positions) between $69.4K USD and $70K USD, as noted by BTC analyst and trader CrypNeuvo.
In this context, price action tends to follow these liquidation levels (in bright yellow), primarily influenced by market maker activities. Therefore, the cluster at $70K USD acted as a magnet for the recent rally, liquidating a large number of short positions at the $70K USD level.
Over $80 million in short positions liquidated
According to data from Coinglass, $88 million in positions were liquidated after BTC broke above the $70K USD psychological level.
Speculators who had bet on the price being rejected at the $70K USD level (short positions) suffered the most losses, with nearly $83 million in liquidations over the past 24 hours.
Furthermore, this also indicates a strong bullish sentiment as the market awaits the outcome of the US elections next week.
With a high probability of a Trump victory in the US elections, according to prediction websites, Bitfinex analysts believe the US elections could be a 'perfect storm for BTC'. The analysts stated,
The convergence of election uncertainty, the 'Trump trade' narrative, and a favorable Q4 season creates a perfect storm for Bitcoin, promising an exciting period ahead regardless of the noisy price swings leading up to the election in the next two weeks.
Analyst Peter Brandt shared a similar scenario and believes that the move above $70K USD could mark the start of the parabolic rally post-halving that many have been anticipating.
That said, there is new buying pressure from US investors as BTC surges, as evidenced by the reversal of the Coinbase Premium Index.
In most cases, strong demand from the US (green) always coincides with a sustainable recovery for BTC.
While the recent improvement is very positive for BTC, the reading still indicates relatively low investor interest compared to March, when BTC reached a new all-time high.
On the daily price chart, BTC is in a bullish market structure. It is only 3.5% away from the all-time high and may soon enter a price discovery phase.
However, it has encountered a resistance barrier, and a significant opposing resistance zone (in red) has formed at the all-time high in March. For the uptrend to continue in the short term, BTC needs to break through the $71K-$73K USD obstacle.
