BTC Approaches Critical Juncture as Price Eyes $70K Threshold, Market Analyst Reports
As Bitcoin's horizontal movement tightens, a crucial market indicator suggests an imminent decisive move. Can buyers push through the resistance barrier at $70,000?
On Wednesday, Bitcoin (BTC) continues to move within a constrained corridor between $65,000 and $70,000, a price pattern that has persisted throughout the last fortnight.
Technical analysis on shorter timeframes reveals the presence of a bullish divergence, indicating diminishing downward momentum in the near term, whereas derivatives markets point to new long contracts being established from the $66,000 level.
Market observers suggest that this price compression could be setting the stage for a breakout move, with concentration of liquidity beneath the $66,000 mark and above the $71,000 threshold representing critical areas that could determine the subsequent price trajectory.
Bullish divergence pattern emerges at key support zone for Bitcoin
Analysis of the one-hour timeframe reveals Bitcoin developing a downward-sloping channel that mirrors the formation observed last week, which ultimately resulted in upward movement approaching $70,000. Inside this channel, the relative strength index indicator (RSI) is displaying an unmistakable bullish divergence pattern.
This divergence pattern materializes when price action registers lower lows or maintains equal lows, yet the RSI simultaneously records higher lows. Such a configuration indicates that downward momentum is weakening across the shorter time horizon.
Should Bitcoin achieve a sustained climb beyond $68,000, this may validate bullish momentum, potentially triggering a price advance toward the external liquidity zone and resistance barrier positioned above $71,500.
The critical invalidation threshold lies beneath the $66,000 level, an area where internal liquidity pools are concentrated around $65,000. A price decline below this zone would nullify the divergence pattern and redirect attention toward the support range on higher timeframes spanning $62,000 to $60,000.
Analysis of derivatives markets reveals that aggregated open interest has experienced a 3% increase to $15.50 billion from $15.10 billion during the preceding 48 hours, despite the price experiencing downward drift.
The combined funding rate has risen to 0.046%, indicating an expansion of long positioning among futures market participants.
Beginning Feb. 15, approximately $250 million in combined long liquidations have taken place, compelling leveraged traders to exit their positions beneath the $67,000 mark. These forced liquidations on the long side eliminate excessive leverage from the market, potentially stabilizing price action and establishing more favorable conditions for upward movement once market participants renew their engagement.
Analysis of futures momentum and broader market positioning
Cryptocurrency market analyst Amr Taha highlighted a significant decline in the Binance Bitcoin futures power 30-day change metric, which monitors the net variation in price action, funding rates, and open interest levels. The indicator has dropped to -0.18, reaching levels comparable to those observed during the April to May 2024 period.
According to Taha, this development could signal a pivotal moment for BTC, given that comparable deeply negative values during the April to May 2024 timeframe ultimately preceded a robust recovery that propelled Bitcoin beyond the $100,000 threshold, following the indicator's transition to positive territory during the second half of 2024.
In parallel, cryptocurrency analyst Dom observed that spot market order books are displaying limited liquidity within the $66,000 to $69,000 range, characterizing current market behavior as neutral, with BTC's price undergoing compression in advance of an anticipated breakout attempt.
Liquidity heatmap analysis provided by BTC trader Daan reveals concentrated liquidity zones positioned below $66,000 and above $71,000, identifying regions where stop-loss orders and inactive positions are presumably aggregated.
