Bitcoin Surges Toward $40K with Short Liquidations, Reigniting Bullish Momentum

Bitcoin (BTC) has witnessed a spectacular surge, inching closer to the $40,000 mark as it outpaced sellers and liquidated around $60 million in shorts over the span of two days. The latest rally propelled BTC/USD to new highs in 2023, reaching $39,730 and marking a significant milestone since mid-2022. This surge follows an upward momentum that had been building in the days leading up to the breakthrough $39,000 level.

Short Liquidations and Unpredicted Bitcoin Movements

BTC price at the time of writing this article (Source: TradingView)

Data from TradingView reveals that a sudden surge across Bitcoin and altcoins led to the liquidation of approximately $60 million in shorts. Notably, popular trader Skew suggested that a significant move occurred as someone seemingly ran all shorts across the board on most pairs.

This unexpected turn of events left BTC price behavior around the weekly open in question, with a gap between CME Bitcoin futures’ closing price of $39,225 and the spot price. Analysts, such as Daan Crypto Trades, pointed out that during strong trending environments, weekend moves often break out, creating gaps that may not be filled immediately.

Bullish Signals and Price Outlook

BTC/USD chart with annotations, incorporating CME futures price data (Source: Daan Crypto Trades/X)

As Bitcoin approaches the $40,000 threshold, market participants are focusing on bullish signals on longer timeframes. Analysts like Alan Tardigrade noted that BTC/USD has exited a downward channel in place since its November 2021 all-time high of $69,000, declaring that Bitcoin has entered “All-the-way-UP mode.”

BitQuant, recognized for his bullish predictions, anticipates a return to previous highs before a potential correction. Both perspectives draw parallels with behavior observed in previous Bitcoin bull markets. BitQuant’s earlier prediction of BTC/USD surpassing record highs before the next block subsidy halving in April 2024 adds to the optimistic sentiment, aligning with a trajectory reminiscent of previous bullish cycles.

Conclusion

In the wake of Bitcoin’s surge towards $40,000, the market experiences revived bullish sentiment and challenges traditional analysis methods. As Bitcoin enters “All-the-way-UP mode,” analysts and the community eagerly await signals for a sustained upward trend or a potential correction. Amidst the dynamic cryptocurrency market, Bitcoin’s trajectory continues to captivate the attention of traders and enthusiasts, with the unpredictability of weekend moves adding an additional layer of intrigue.