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Bitcoin’s price was up 3% after constant drawdowns since the end of January. The top cryptocurrency managed to rebound above $80,000 after a brief decline below the range on March 11.
Bitcoin weekly chart. Source: Cointelegraph/TradingView
After the US core Consumer Price Index (CPI) came in lower than expected at 3.1% on March 12, Bitcoin's market structure now sees the possibility of a quick bullish turnaround.
Bitcoin liquidity clusters at $84K-$85K
After Bitcoin's (BTC) price tumbled on March 9, it rebounded to test the overhead resistance zone between $84,000 and $85,000 three times, spurring traders to aggressively build short positions in this range.
The liquidation heatmap data suggested that more than $300 million in short positions were piled in this price region, which would be liquidated if the price moved above the $85,000 resistance.
Bitcoin 1-week liquidation heatmap. Source: CoinGlass
With a lack of downside liquidity below $77,000, the probability of BTC moving toward upside liquidity increased. Moreover, triggering liquidations above $85,000 could fuel further bullish momentum, allowing Bitcoin to form a higher high and turn this level into new support.
A CME Bitcoin futures gap from the previous weekend also remained unfilled between $85,000 and $86,000. With a 100% record of six gaps filled in the past four months, this setup further increased the chances of flipping the overhead resistance into support at $85,000.
Bitcoin 4-hour chart. Source: Cointelegraph/TradingView
If this happens, the next major resistance lies at $90,000, which could liquidate over $1.6 billion in short positions for a retest of the $95,000 resistance level above, i.e., a 12% jump from the current price.
Related: Bitcoin must secure weekly close above $89K to confirm bottom has passed
Bitcoin analyst Mark Cullen underlined a similar outlook for Bitcoin but warned that the price continues to move “correctively,” implying further sideways movement before a short squeeze.
On the contrary, Valeria, a crypto analyst and funded trader, said that BTC was showing signs of distribution near the $85,000 range, which is short-term bearish. The trader highlighted that the BTC price might thread lower below $80,000 before a bullish breakout occurs.
Coinbase, Binance diverge on orderbook trends
Spot traders on Binance have been aggressively selling over the past few days, according to data from Aggr.trade, with selling pressure peaking during the local lows at $76,650.
Conversely, Coinbase spot buyers placed bids here, leading to BTC’s rebound above $80,000.
Binance, Coinbase orderbooks. Source: Aggr.trade
On March 12, a similar discrepancy was observed, with Binance spot traders selling near the $85,000 resistance, as Coinbase traders defended the price at $81,000 during the early US trading session, avoiding further downside.
Related: Crypto trading volume slumps, signaling market exhaustion: Analysis
While Coinbase has led BTC’s rally in the past, an opposing stance between the two leading exchanges might slow BTC’s momentum to move swiftly through the resistance levels.
Thus, for Bitcoin to reclaim higher highs at $85,000, $90,000 and $95,000 over the next couple of weeks, spot trading activity between the two major exchanges may need more collective direction.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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