Key Points
- Bitcoin (BTC) crossed the $70K mark, reaching a four-month high of $71.5K.
- A liquidity grab and bullish market sentiment are driving the recent price surge.
Bitcoin (BTC) recently broke the $70K psychological barrier, reaching a four-month high of $71.5K. This has resulted in an 11% gain for October, marking a significant breakout from its multi-month consolidation range since March.
Driving Forces Behind the Surge
Part of the recent surge above $70K is attributed to a liquidity grab. Significant liquidity clusters (short positions) were noted between $69.4K and $70K, as pointed out by BTC analyst and trader CrypNeuvo.
Price action tends to follow these liquidation levels, which are largely influenced by market maker moves. Consequently, the cluster at $70K acted as a magnet for the recent upswing, leading to the liquidation of substantial short positions at $70K.
Liquidation of Short Positions
Coinglass data reveals that $88 million positions were liquidated after BTC broke above the $70K psychological level. Speculators who anticipated a likely price rejection at $70K suffered the most, incurring nearly $83 million in losses in the past 24 hours.
This also suggests a strong bullish sentiment as the market awaits the outcomes of the US election next week. The likelihood of Trump winning the US elections, according to prediction sites, could create a ‘perfect storm for BTC,’ as per Bitfinex analysts.
Furthermore, there has been a renewed demand from US investors as BTC soared, as indicated by the reversal of the Coinbase Premium Index. However, the weak reading implies that investor interest is still relatively low compared to March when BTC hit a new all-time high.
Looking at the daily price chart, BTC is in a bullish market structure. It’s only 3.5% away from its ATH and could soon hit price discovery. However, it encountered resistance, and a bearish order block formed at March’s ATH. To continue the uptrend in the short term, BTC needs to clear the $71K-$73K hurdle.
