Why Bitcoin’s rally to $52k is not impossible

  • Bitcoin exchange reserves exhibited a curious lack of trend.
  • The liquidation heatmap suggested BTC prices could rally higher.

Bitcoin [BTC] managed to rally past the highs of a two-month range once again on the 10th of February. This was not the bulls’ first attempt to break the $47k resistance mark in the past six weeks.

On the 11th of January, BTC surged to $49k but closed the day’s trading at $46.3k, which was within the range. This signified a rejection. This time around, prices could be attracted to the liquidity above $50k.

Examining the exchange reserves of Bitcoin

AMBCrypto analyzed the exchange reserve metric from CryptoQuant to see if holders were accumulating more Bitcoin. A recent AMBCrypto report noted that the Bitcoin supply on exchanges fell lower.

A downtick in this metric would signal more BTC moving out of centralized exchanges and into the private wallets of BTC HODLers. You can find out more about the profit of the Bitcoin you hold here.

Bitcoin exchange reserve

Source: CryptoQuant, Bitcoin Exchange Reserve

The past month’s CryptoQuant data showed that the metric has also formed a range since early December.

Previously, from August till late November, the metric trended downward and Bitcoin rallied from $29.2k to $43k (albeit with a drop to $25.2k in mid-September).

Hence, a lack of a steady downtrend was a sign that BTC holders were not convinced of another rally of the magnitude of the September-November one.

Futures data could shed more light on speculator sentiment

AMBCrypto analyzed the short liquidations on CryptoQuant alongside the exchange reserve. The chart represents the amount of short positions liquidated in the derivatives market, denominated in Bitcoin.

Bitcoin Short Liquidations

Source: CryptoQuant, Bitcoin Short Liquidations

The data showed that the amount of short liquidations triggered during the recent breakout was high, but not close to the early December or the highs on the 9th of January.

Therefore, even though the prices were higher than the January attempt, the short positions liquidated weren’t.

This pointed toward a more bullish sentiment in the market than before. Fewer participants got liquidated betting on a reversal near the $46k region.

The liquidation heatmap could illuminate where Bitcoin prices could go next.

Bitcoin Liquidation Heatmap

Source: Hyblock, Bitcoin Liquidation Heatmap

AMBCrypto’s analysis of the Hyblock Liquidation Heatmap highlighted that the psychological $50k level was estimated to have $16 billion short liquidations.

Above it, the $51.2k and $52.2k had $31 billion and $27 billion in estimated liquidation levels.

Read Bitcoin’s [BTC] Price Prediction 2024-25

Therefore, a further rally toward the $52k mark can be anticipated. The presence of liquidity to the north meant prices would be attracted toward it before a potential reversal.

To the south, the recent bullish trend meant the $38.2k level was the nearest southern area of interest with a comparable amount of liquidations.

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