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The Glassnode cofounder, who goes by the handle "Negentropic" on X, is discussing the Bitcoin price.
The Glassnode cofounder shares his thoughts in a new tweet, highlighting that liquidity remains key for the BTC price. He offers his analysis, stating that Bitcoin's recent surge above $42,200 provided liquidity for long positions with a neutral impulse.
At the moment, he says the Bitcoin price is moving to fill the liquidity gap above $42,000, indicating potential volatility and about $659 million in liquidations have occurred.
Based on this, Negentropic offers his outlook that bullish momentum could trigger $1 billion in short position liquidations, potentially propelling the market upward. This scenario might trigger a "short squeeze," which happens when the price of an asset sharply increases as a large number of short sellers are compelled to exit their positions.
Tomiwabold OlajideThis bullish outlook is consistent with a drop in selling pressure from investors taking profits in Grayscale Bitcoin Trust (GBTC).
GBTC outflows appear to be slowing in recent days, and China's central bank has announced a $140 billion injection into the financial system.
The Glassnode cofounder stated in an earlier tweet that the liquidity surge has begun as China attempts to prop up its markets with enormous liquidity. He believes this might be the catalyst that propels the cryptocurrency and equity markets into the first half of 2024.
Bitcoin might reach $50,000 in Q1, 2024
BTC rose to a high of $42,839 on Jan. 28 before falling to roughly $42,000 at press time. The latest Bitcoin price action is part of a recovery rally that began last week following a pullback to $38,500.
Markus Thielen of 10x Research forecasts that Bitcoin prices could reach $50,000 by the end of the first quarter.
"Bitcoin rallied just shy of the 42,800 short-term resistance level implied by the November to January trend channel. While the 43,000–44,000 area probably turns into a minor resistance area, we expect Bitcoin to pierce through and reclaim the 50,000+ level by the end of this quarter," Thielen wrote in a tweet on Monday.
Arman Shirinyan
Dan Burgin
Alex Dovbnya