The sudden squeeze of shorts has caused Bitcoin bears to experience a roasting as the price of BTC reaches levels not seen since the Binance regulatory controversy.
Exchanges were responsible for the sudden increase, as a group of shorts was eliminated to clear the way for higher levels. These shorts, which were worth roughly 1,500 BTC, had remained from Bitcoin’s previous movements, according to Skew, an analyst.
$BTC Spot CVD Buckets & Delta Orders
MMs selling pretty heavily here into some large buyer, typically price compresses till either side is out of capital to move price or gives up.
Sunday shenanigans, GN CT ❤️ pic.twitter.com/4MFz6qSAYf
— Skew Δ (@52kskew) March 26, 2023
Bitcoin’s price movement has successfully eliminated all losses incurred following the announcement that Binance, the largest cryptocurrency exchange, is under scrutiny by U.S. regulators.
After the recent rebound, Bitcoin’s price has been consolidating. Although the market structure has become bullish in the short term, there is still a crucial level that must be surpassed for the price to initiate a new bull market.
Is $30K Next For Bitcoin?
If the $30,000 level is surpassed, the likelihood of a new bull market would increase significantly. However, if there is a potential rejection from that area, it could result in a drop back down to the $25,000 support zone. It’s worth noting that the RSI indicator is indicating significant bullish momentum, but it’s also nearing the overbought area and requires careful monitoring.
In the 4-hour timeframe, a bullish market structure is evident. After bouncing back from the $20,000 level, the price has risen sharply and surpassed several levels. Additionally, the recent consolidation is more apparent in this timeframe, as the price seems to have formed a bullish flag that is presently being broken to the upside.
The Allegations Against Binance
Given the recent CFTC accusations against Binance and its CEO CZ, it would be useful to examine the exchange and its users’ behavior.
There have been two significant increases in outflows recently, with the first and more substantial one occurring during the $17,000 low formation. The second increase, which is of greater interest to us, has been happening since the start of March. There are two possible explanations for this trend.
Some investors may be optimistic that a new bull market is on the horizon and may be eager to withdraw their coins and store them in their personal wallets. Secondly, the recent allegations may be responsible for this trend, with some whales withdrawing their assets out of caution as things could worsen for Binance.
In any case, while these crackdowns may have short-term negative impacts on the crypto market, coins flowing out of exchanges could ultimately benefit the price in the long run as the supply would gradually shrink.