© Reuters. Big Bitcoin Move Could Trigger Billion-Dollar Liquidations, Analyst Warns BTC Bears
U.Today – The co-founder of Glassnode, who goes by “Negentropic” on X, is discussing the price.
The Glassnode co-founder shares his thoughts in a new tweet, highlighting that liquidity remains key for the price of BTC. He offers analysis of it, stating that Bitcoin's recent rise above $42,200 provided liquidity for long positions with neutral momentum.
At the moment, it says Bitcoin price is moving to fill the liquidity gap above $42,000, indicating potential volatility and around $659 million in liquidations have occurred.
Based on this, Negentropic offers his view that the bullish momentum could trigger $1 billion in short position liquidations, which could push the market higher. This scenario could trigger a “short squeeze,” which occurs when the price of an asset rises sharply as a large number of short sellers are forced to exit their positions.
This bullish outlook is consistent with a drop in selling pressure from profit-taking investors in Grayscale Bitcoin Trust (GBTC).
GBTC outflows appear to be slowing in recent days, and China's central bank has announced a $140 billion injection into the financial system.
The Glassnode co-founder stated in a previous tweet that the liquidity surge has begun as China attempts to shore up its markets with huge liquidity. He believes this could be the catalyst that drives the cryptocurrency and stock markets into the first half of 2024.
Bitcoin could reach $50,000 in the first quarter of 2024
BTC rose to a high of $42,839 on January 28 before falling to around $42,000 at the time of publication. Bitcoin's latest price action is part of a recovery rally that began last week following a pullback to $38,500.
Markus Thielen of 10x Research predicts that Bitcoin prices could reach $50,000 by the end of the first quarter.
“Bitcoin recovered just below the 42,800 short-term resistance level implied by the November-January trend channel. While the 43,000 to 44,000 area is likely to become a minor resistance area, we expect Bitcoin to break through and recover to the 50,000+ level by the end of this quarter,” Thielen wrote in a tweet on Monday.
This article was originally published on U.Today.
