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The 50-day moving average has crossed above the 200-day, a historically bullish technical signal completing the golden cross formation for Bitcoin. This occurs as BTC surpasses $110,000 and approaches a crucial resistance level close to $113,000, in line with a prediction made by well-known analyst Benjamin Cowen. Both technicals and significant short liquidations are driving the recent breakout.
Over the past day, a violent short squeeze caused over $239 million in short positions to be wiped out. Bitcoin was able to surpass its prior local highs thanks to these liquidations, which served as rocket fuel. Although the price action is impressive, Bitcoin may now experience volatility. Although price action is already bouncing off of trendline resistance, Cowen's $113,000 prediction makes sense.
Several charts display a distinct upward trend that is currently running into sell walls that are stacked between $111,000 and $113,000. Short-term overextension of the asset is possible as the RSI approaches overbought territory (76 on the daily). Market cool-downs and profit-taking are probable. The strength of the breakout is validated by volume, and the uptrend's momentum is confirmed by a noticeable surge on daily candles. But traders need to exercise caution.
Golden crosses are not always reliable, but historically they have been able to spark additional upside. Bitcoin might retetest support at $101,000, the location of the last breakout, following a strong rejection at $113,000. With headlines already urging $200,000 targets, market sentiment is leaning very bullish. Usually, volatility comes after that kind of exuberant optimism.
The subsequent rally may start if Bitcoin closes above $113,000 with a strong and distinct close and sustained volume support. The golden cross is real, Cowen's call is technically sound and momentum is strong, but Bitcoin is skating close to resistance due to overly optimistic sentiment. A break or rejection at $113,000 could signal the start of the next stage of this bull cycle.
Vladislav Sopov
U.Today Editorial Team