Bitcoin (BTC) is trading in a good range of $65,000 to $70,000 on Wednesday, a structure that has held for the past two weeks.
The lower time frames show a bullish divergence, indicating easing short-term selling pressure, while futures data points to the opening of recent long positions starting at $66,000.
Analysts imagine compression could precede a breakout attempt, with liquidity clusters below $66,000 and above $71,000 being the zones that might define the following directional move.
Bitcoin’s bullish divergence is near a support level
On the one-hour chart, Bitcoin is forming a descending channel just like last week's structure that preceded a move towards $70,000. Within this channel, a transparent bullish divergence has developed on the Relative Strength Index Indicator (RSI).
A bullish divergence occurs when price makes lower or equal lows while the RSI shows higher lows. This sequence suggests that selling pressure is losing strength on the shorter time-frame.
A sustained break above $68,000 could confirm the momentum and result in a price rally towards external liquidity and the resistance level above $71,500.
Bitcoin one hour chart. Source: Cointelegraph/TradingView
The invalidity threshold is below $66,000, with internal liquidity near $65,000. A break below this area will invalidate the divergence setup and shift the main focus to the upper time-frame support area between $62,000 and $60,000.
Derivatives data shows that aggregate open interest rose 3% to $15.50 billion from $15.10 billion over the past two days, whilst the worth trended lower.
The aggregate funding rate has increased to 0.046%, indicating growing long exposure amongst futures traders.
Since February 15, there have been roughly $250 million in aggregate long liquidations, leading to the closure of leveraged positions below $67,000. These sell-offs on the long side reduce excess leverage, which may stabilize the worth and create higher conditions for an uptrend once traders return to the market.
BTC price, aggregated open interest, funding rate and liquidations. Source: Velo data
Futures momentum and macro positioning
Crypto analyst Amr Taha noted a pointy decline within the 30-day change in Binance Bitcoin futures, which tracks the web change in price, funding and open interest. The index fell to -0.18, reaching levels last observed between April and May 2024.
Binance Bitcoin Futures Power 30D Change. Source: CryptoQuant
Taha said this could possibly be a turning point for BTC, as similar deep negative readings between April and May 2024 led to a robust rally that pushed Bitcoin above $100,000 once the index turned positive within the second half of 2024.
Meanwhile, crypto analyst Dom said spot order books show low liquidity between $66,000 and $69,000 and described current activity as neutral, with BTC's price falling ahead of an attempted breakout.
Liquidity heatmaps shared by BTC trader Daan show dense liquidity clusters below $66,000 and above $71,000, indicating areas where stop orders and quiet positions are more likely to be concentrated.
BTC liquidity heatmap. Source: Daan Crypto Trades/X
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