The Bitcoin price rose by 4.6% from $44,332 on Feb. 8 to hit a four-week high of $46,374 on Jan. 9, according to data from CoinMarketCap. This resulted in $95.82 million worth of short positions being liquidated across the crypto market.
Before the rise, many traders expected BTC to drop to $40,000 as they waited for the volatility that would push the price upward, but that was obviously not the case.
According to data from futures trading and information platform Coinglass, short-position liquidations for Bitcoin topped $34.71 million on Feb. 8 against $4.5 million in long liquidations.
Bitcoin liquidations chart. Source: Coinglass
With the substantial liquidations, it’s important to analyse where the big crypto could be headed over the next few days.
Independent analyst Ali spotted the SuperTrend indicator sending a buy signal on the BTC monthly chart. The SuperTrend indicator is a “tool known for its precision in predicting $BTC bull markets.” This has made the analyst more bullish on Bitcoin as he added to his holdings.
If the buying continues, more investors could decide to get onto the bandwagon, adding to the hindwinds. What are the key levels to watch from here?
Bitcoin price analysis
BTC fell from 20-month highs above $49,000 reached on Jan. 12 to set a swing low around $38,542 on Jan. 23.
This downturn saw the price lose a key support level at $41,890, embraced by the 50-day exponential moving average (EMA). At the time of writing BTC had regained most of the lost ground as it retraced its path upward.
The 78.6% Fibonacci retracement level at $46,735 and the psychological level at $48,000 are key levels to watch on the upside. Above that, the $49,000 swing high could provide the last line of resistance for the flagship cryptocurrency before hitting the coveted level of $50,000. Such a move would bring the total gains to 8%.
BTC/USD daily chart. Source: TradingView
Important levels to watch on the downside are the 61.80% Fibonacci retracement level at $44,980, the $44,000 major resistance level and the 38.2% retracement level at $42,500.
Lower than that, Bitcoin may drop toward the 23.20% retracement level around $41,000 and later to $40,000. Breaking this barrier would signal a sustained downtrend for Bitcoin with the next logical move being a decline toward the $38,000 demand zone.