Original author: @SoulzBTC
Original translation: Sharon, BlockBeats
Editor’s Note:
@SoulzBTC is a well-known KOL in the crypto community and also a full-time trader and technical analyst.
(Any of the following views are the author's personal views and should not constitute the basis for investment decisions, nor should they be regarded as recommendations or suggestions for engaging in investment transactions.)
Why has BTC surged 25% in the past 5 days? In this post I will explain: 1. Should you open a short or long position in BTC? 2. I will use on-chain data to support your analysis. 3. BTC is in the context of an uptrend.
Why short BTC?
The next key resistance is at $37,330 and I highly doubt we should retest it. BTC reached its highest point at $35,300 so selling should start from there. $31,500 must be retested as support as BTC did not retest at the highs.
Pulling up before BTC reaches highs
Last week, I explained on the livestream why BTC should aim for higher highs. A new range is forming and liquidity is leaving us with wicks. HTF (PA) is bullish, not bearish. ETF news could come after the scam…
Analyzing BTC using on-chain data
Tracking MM supply and demand by looking at OB data. MM spot and PERPS are both rising. Spot OB has reduced a bit, but PERPS has not. - MM PERPS is pulling up heavily. Therefore, I expect it to fall eventually.
BTC Futures Liquidation
The rally was driven by a “double short squeeze” that resulted in $54 million in liquidations on October 17. This was followed by an additional $125 million during the surge to $35,000. These events are very similar to the destruction in January and August.
Liquidation heat map on BTC
Liquidity is below us, not above. The top was at $35,300. Why would price target this area again? My next target is the liquidity pool marked on the chart. BTC should calm down and lower targets from here.
Background of BTC’s upward trend
1. BlackRock's Bitcoin spot ETF is listed on Nasdaq IBTC; 2. Bitcoin ETF has triggered a large demand from institutional and retail investors; 3. BTC PA is very sensitive to news about the spot ETF approval process. Even a piece of fake news from 1 week ago can stir up market sentiment.
I hope this post helped you understand the current situation of BTC.
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