Bitcoin price around $80.000 with heightened risk of pullback

Bitcoin is trading around $80.300 on Saturday, a decline of 1.1% over the past 24 hours. Analyst CrypNuevo sees several signals pointing to an increased risk of a short-term pullback. Although a breakout to the upside is ultimately likely according to him, he considers a correction towards the mid-range the most plausible scenario first, as long as Bitcoin fails to break resistance.

Bitcoin is available at OKX and Bybit.

In brief:

• Bitcoin is trading around $80.300 and fails to break through resistance above
• CrypNuevo signals an increased risk of a long squeeze towards the mid-range
• According to the analyst, a breakout above $82.900 opens the door to $89.300

High volumes may indicate build-up of short positions

Bitcoin has made several attempts to break through the resistance zone, but has repeatedly failed. CrypNuevo notes that the high-volume green candles that appear in the process probably do not reflect buying pressure, but rather the build-up of short positions by larger market participants.

The analyst also points to the accumulated liquidation levels. According to his analysis, the majority of the liquidation levels are located at the lower end of the market. This increases the risk of a so-called long squeeze, in which a downward move causes forced closures of long positions. At present, $17 billion in long positions are open that could be liquidated in the event of a further decline, which forms the threshold for a medium-high risk.

Bart Simpson pattern and bullish scenario as alternatives

The combined signals remind CrypNuevo of a so-called Bart Simpson pattern, in which a sharp rise is quickly followed by an equally sharp decline. In that scenario, Bitcoin would give back part of its recent gains and could fall towards the mid-range of the current trading range, where he expects a new bottom. Above that mid-range is a liquidity zone around $89.300 that could still be reached later in such a scenario.

Nevertheless, the analyst does not rule out the bullish scenario. After the recent sweep of the local bottom and the subsequent rebound, there are also positive signals. But CrypNuevo wants to see confirmation first before he acts on it. That confirmation consists of a breakout and acceptance above the previous high, with which Bitcoin would form a higher high. Earlier, an analyst already pointed out that the bottom of $58.000 was clearly visible in the chart.

His conclusion is that a breakout from the current range is ultimately plausible, but that the liquidity signals in the short term point rather to a correction. A sustained breakout above $82.900 would, according to him, clear the way for a further upward move towards $89.300.