Short sellers face liquidations as Bitcoin breaks above $68,000

Bitcoin (BTC) experienced a significant surge on April 4, gaining over $4,000 in a single day as traders anticipated potential short liquidations. The cryptocurrency’s price reached a high of over $69,000, but as of press time is trading at $66,830 marking a 0.74% increase and pushing its market capitalization to $1.31 trillion.

Market observers were impressed by Bitcoin’s resurgent price action, with popular trader Daan Crypto Trades noting that the cryptocurrency was “indeed breaking higher and filling that inefficiency in rapid fashion.” He also pointed out the presence of “solid spot bid & spot premium.”

#Bitcoin Indeed breaking higher and filling that inefficiency in rapid fashion.

Solid spot bid & Spot premium as well. https://t.co/daKFiC1Sp8 pic.twitter.com/v6sN2tFggH

— Daan Crypto Trades (@DaanCrypto) April 4, 2024

Fellow trader Skew concurred, stating that the rally was primarily driven by spot market buying rather than derivatives. “So far clear spot driven price action,” he told his followers on X, adding that “spot CVDs trailing price (spot bid)” and “spot premium (spot trading above perps)” were evident. The 24-hour trading volume for Bitcoin reached $37.48 billion, representing a volume-to-market cap ratio of 2.86%.

$BTC
So far clear spot driven price action

Spot CVDs trailing price (spot bid)
Spot Premium (spot trading above perps)

This is healthy but will need to sustain for more than just a few hours pic.twitter.com/IilBfqP7OU

— Skew Δ (@52kskew) April 4, 2024

However, Skew cautioned that the momentum needed to persist for more than just a few hours to effect lasting change in the market.

As Bitcoin’s price continued to rise, short sellers faced the possibility of liquidations. Data from monitoring resource CoinGlass revealed that a $32.7 million wall of liquidity was taken out when BTC/USD surpassed $68,620.

A good sign, but inconclusive

Despite the impressive rally, significant resistance remained at the $69,000 mark, which was the site of the previous BTC/USD all-time high from late 2021. Another influential trader and analyst Josh Rager noted the strong support provided by the 200-period exponential moving average (EMA) on four-hour timeframes but demanded that Bitcoin close above $71,000 to confirm a bullish trend.

$BTC

Knocking on that moving average about a nice bounce

Here, not too busy trading outside of some spot and on-chain

Needs to close higher above $71k again pic.twitter.com/w0P6PCg90W

— Rager (@Rager) April 4, 2024

Skew described the $69,000 level as “important” and stated that “dips from here will be important to see the level of limit buying to gauge actual demand for higher prices.”

$BTC Binance Spot
Above here spot supply increases considerably

Structurally $69K is important; overall trend fight occurs here
– Above bulls push for control
– bears will try fight here imo

Key flow points will be how significant passive sell pressure is (limit selling) & how… pic.twitter.com/mgCpcWlVgR

— Skew Δ (@52kskew) April 4, 2024

The news follows Goldman Sachs chief investment officer, Sharmin Mossavar-Rahmani, recently stating that Bitcoin is not considered an investment asset class and that the bank does not believe in cryptocurrencies. Those events follow Bitcoin soaring past $71,000 for the first time in history in mid-March following an approval for crypto exchange-traded products by the United Kingdom’s Financial Conduct Authority.

Featured image: Ideogram