Key Points You Should Know:
- Bitcoin has revisited $113,000 before Tuesday’s Wall Street open amid talk of a new gold copycat move
- That level becomes a recommendation for your long entries, but not everyone is bullish on this move
- Current liquidity conditions show a $115,000 short squeeze potentially developing
Understanding the Current Price Action
Bitcoin returned to $113,000 on Tuesday as your trading perspectives on BTC price began to shift. The cryptocurrency reached new local highs of $113,279 into the Wall Street open, building on a higher low from the weekend that preserved $110,000 as your key support level.
Now, you’re seeing market participants recognize the potential for bulls to make a more sustained assault on overhead resistance. One prominent crypto trader and analyst noted that Bitcoin had reclaimed the 20-day simple moving average near $111,500 and had also won back the crucial $112,000 mark.
The connection to gold’s performance is particularly noteworthy for your analysis. As gold prints strong new all-time highs, Bitcoin is likely to follow this pattern, referencing the cryptocurrency’s habit of following breakouts in gold with a slight delay.
Your Entry Strategy Considerations
If you’re looking at potential positions, one fellow trader described $113,000 as a suitable entry point, confirming that “above $113,000 is a long position on the daily timeframe.”
However, you should be cautious. Some market observers have flagged a lack of spot-market interest as a reason to doubt the sustainability of the current local uptrend. This means that while the price is moving higher, the underlying demand from actual buyers rather than derivatives traders may not be as strong as the price action suggests.
Liquidity Analysis for Your Trading Decisions
When you examine crypto exchange order-book liquidity, there’s a thick line of sell orders immediately above the current price, extending to $114,500. This resistance zone has caught the attention of traders who suspect it might be a deliberate setup to influence price trajectory.
As one crypto investor and data analyst noted, “Bitcoin is knocking on the door of a high-leverage short position zone.” This suggests that if you’re positioned correctly, there could be significant upside as these short positions get squeezed.
Trading resource analysis forecasts that the zone below $115,000 may provide “some friction” for Bitcoin bulls. However, the argument remains that macroeconomic tailwinds – specifically the US Federal Reserve cutting interest rates next week – should provide a catalyst for “a return to the highs.”
The Rate Cut Opportunity
The upcoming Federal Reserve rate cut represents a crucial macroeconomic tailwind for your Bitcoin positions. Lower interest rates typically drive investors toward risk assets and inflation hedges, categories where Bitcoin increasingly finds itself.
This monetary policy shift could provide the fundamental backdrop needed to push through the technical resistance levels and reach new highs. However, you should remain aware that market dynamics can shift quickly.
Risk Management for Your Portfolio
Despite the bullish setup, you must remember that liquidity flushes are “always a possibility.” This means that even with positive fundamentals, the market could still test lower support levels before making its next major move higher.
The combination of technical resistance around $114,500-$115,000 and the potential for short squeezes creates an interesting risk-reward scenario for your trading decisions. While the rate cut provides fundamental support, you should be prepared for volatility as the market navigates these key levels.
Your Action Plan
As you evaluate this opportunity, consider that the convergence of technical factors (reclaimed moving averages, gold correlation), fundamental catalysts (rate cuts), and market structure (short squeeze potential) creates a compelling setup. However, maintain proper risk management and position sizing, as cryptocurrency markets remain highly volatile and unpredictable.
The key levels to watch are $113,000 as your entry threshold, $115,000 as the short squeeze target, and $110,000 as your downside support. The upcoming rate cut announcement will likely be the catalyst that determines which direction this setup resolves.