Bitcoin surprised everyone again. Last week, the outlook for risky assets seemed very bearish as the Russian invasion began, leading to a massive stock market crash and Bitcoin.

Bitcoin fell quickly and even broke through $36,000. However, demand arose and the price was quickly pushed back above the support and surged towards the $45,000 area.

Technical Analysis

Long term: daily chart

The 50-day SMA has definitely been conquered on the daily time frame. The price is currently struggling in the zone between the 100-day SMA and $45,000. If it can break through these zones, the next key resistance will be the $50,000 area.

On the other hand, if the price rejects at the current levels, the 50-day SMA will act as the initial support.

BTC/USDT daily chart | Source: TradingView

In the short term

Looking at the 4-hour timeframe, the price action looks simpler: the price was pushed above the $36,000 level, turning the breakdown into a false breakout.

After a few days of struggling to break above $40,000, massive demand pushed the price above this level and created a major bullish candle that reached the $45,000 resistance area at press time.

For now, the bulls appear to be in full control. However, a short-term correction seems imminent as the RSI shows that Bitcoin is overbought in the short-term.

The $40,000 resistance, which has now turned into support, will be a strong support area along with the aforementioned 50-day SMA and the price will likely form a higher bottom here if a correction occurs.

BTC/USDT 4 hour chart | Source: TradingView

Onchain analysis

Over the past two days, $94 million in short positions have been liquidated after the price broke above $40,000 and surged higher.

The bears are slowly losing ground and the market is currently trading around $44k – $45k.

For the past two weeks, the funding rate has remained mostly negative, absorbing liquidations in this area. As many investors betting on the downtrend have been squeezed out of their positions, they have shifted their focus to buying.

These liquidations are necessary for the market to reduce the leverage used in derivatives.

Source: CryptoQuant

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions

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