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The Bitcoin price seems to have hit an important make it or break it point that will determine the next course of action. While sellers seem to be running out, there is still enough pressure to keep the bulls at bay. This continuous beating down of the Bitcoin price, as well as its failure to make a notable break above resistance at $95,800 in the last few days, suggests there is more to be done. So, what happens when Bitcoin does make a definite breakout?
Bitcoin Price Could Sweep Liquidity At $93,000
With the Bitcoin price being beaten down, there is the possibility that the cryptocurrency could fall a bit further before resuming its uptrend. This was explained by crypto analyst TehThomas on a TradingView post, mapping out the possible directions of Bitcoin, with both hinging on two major levels.
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The first of the major levels mentioned was the resistance at $95,400-$95,800 that has been holding back the Bitcoin price from its campaign for $100,000. The analyst explains that this has become an important level to beat, given the fact that it has rejected the price multiple times already. As a result, there has been the formation of a range just underneath this resistance level as bulls seem to be backing down.
However, regardless of the loss in momentum, the crypto analyst explains that the broader trend structure is still the same. This means that the Bitcoin price is still bullish, especially with a higher timeframe ascending trend line and the formation of higher lows recently.
The one roadblock faced by the Bitcoin price from here is the possibility of it falling to do a liquidity sweep at the $93,000-$93,800 levels. A successful sweep and a rebound from here would see adequate absorption of liquidity, which would be used to fuel a higher price rise. Thomas explains that “This zone is confluenced by the ascending trendline from previous swing lows, offering a clear area for a liquidity sweep.”
Bullish Or Bearish Scenario Next?
In terms of where the Bitcoin price is headed next, it comes down to the liquidity sweep and if resistance is broken. As Thomas explains, a drop to the $93,000-$93,800 level for liquidity is most likely at this point to sweep out late longs and introduce fresh liquidity into the market. “A dip into this level that still respects the trendline would maintain bullish structure despite violating the local higher low.”
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On the flip side, if the Bitcoin price were to fall lower than $93,000, then the sweep could be unsuccessful. This would lead to a break in the bull structure and likely cause the price to collapse further. “In the worst case scenario possibly invalidating the breakout thesis temporarily.”
Featured image from Dall.E, chart from TradingView.com
