A Glassnode analyst’s research of Bitcoin indicates that there has been a huge increase in price, reaching $42,000, which has significantly increased liquidity for long positions. Since it is not influenced by strong bullish or bearish impulses, this move is seen as neutral.
The market is currently focusing on the liquidity gap that is present around the $42,000 area. Price is drawn to fill the space created by this gap, which is frequently accompanied by more volatility. As Bitcoin attempts to close this gap, the current market behaviour is consistent with this notion. During this process, liquidations of over $659 million have occurred, indicating a very active market.
Technically speaking, the chart shows that Bitcoin is presently testing the $42,300 resistance level. The next important obstacle is probably located close to the $43,300 range, which correlates with the current top, if it breaks through this level firmly. On the negative side, there is a support level around about $39,900, which is in line with previous lows and offers some psychological support.
Should the bullish momentum persist, particularly if it is supported by positive market news or sentiment, it may trigger a series of liquidations of short positions. According to estimates, a situation like this may result in short liquidations of almost $1 billion, giving the market a significant boost.
We might witness a major bullish period with goals perhaps stretching into the $47,000 range and, if feasible, $50,000, where the next level of resistance would probably be faced, if Bitcoin continues its upward trajectory and breaks over the $43.3K resistance. It goes without saying that the digital gold may retesting its support at $39,000 if it is unable to continue at the current rate.
