Bitcoin is currently down by more than one percent and is trading slightly above the $98k mark. After hitting an ATH of $98655, the cryptocurrency hit reverse and even dipped below the $96k mark.
However, analyst Josh of Crypto World said that the weekly Bitcoin chart shows strong momentum, with the MACD indicating a bullish trend. The Super Trend indicator on the 4-day chart is also green, suggesting continued bullishness. While short-term pullbacks are normal, the long-term outlook remains positive.
Short-Term Price Action: Pullbacks & Support Levels
Despite the bullish outlook, BTC is seeing a short-term pullback. The price of Bitcoin is showing signs of losing momentum, especially around the critical $100,000 level, which acts as psychological resistance. Pullbacks are expected at levels around $94,000 to $95,000, with further support at $89,000 if the price drops lower.
Bearish Divergence: Historical Parallels
Bitcoin is experiencing a short-term bearish divergence, similar to the price action seen in 2020 before a major breakout above $20,000. Just as the price struggled under that psychological level, the price may see a temporary pullback below $100,000 before eventually breaking through. The current situation shows a similar pattern with a higher price and lower RSI, hinting at a loss of short-term momentum.
Bitcoin’s Pullbacks: Historical Context
It’s important to note that Bitcoin’s pullbacks, even in a bull market, are often bearable. The current 3-4% pullback from the recent highs is small compared to past corrections, such as the 16-17% pullback in 2020.
Liquidity and Short Squeeze Potential
Currently, liquidity is building above the $100,000 level, which could trigger a short squeeze if Bitcoin breaks through that level. This would force many short positions to liquidate, driving the price even higher. Downside liquidity is more limited, but we still have support at around $94,000, with further support levels around $91,000.