Bitcoin Price Surges Past $66,000, Bullish Trend Emerges

Bitcoin (BTC) surged past $66,000, prompting speculation of a bullish reversal. This upward trend is supported by an increase in open interest and leverage, indicating a potential "catch-up rally." The reclaim of $66,600 on a four-hour chart suggests a bullish sentiment, backed by a break in resistance and a surge in the Relative Strength Index (RSI). However, Bitcoin's path towards higher prices requires conquering the $69,000 resistance level and liquidating significant short-leveraged positions.

Bitcoin Price Surges Past $66,000, Signaling Bullish Momentum

The price of Bitcoin (BTC) surged above the crucial $66,000 mark on April 22, fueling optimism that the price action could turn bullish just two days after the Bitcoin halving.

Reclaiming Key Resistance

Bitcoin regained the $66,000 mark on April 22, signaling a potential change in market sentiment that could culminate in the end of the ongoing price correction, according to Kristian Haralampiev, Structured Products Lead at Nexo.

"Traditional finance markets opened relaxed on the back of tension in the Middle East, with risk-on assets going up, while gold opened lower," Haralampiev said. "The increase in open interest across derivatives, along with higher levels of leverage and positioning in the options markets, suggests a catch-up rally may be in the making."

Technical Analysis Points to Bullish Trend

The reclaim of the $66,600 mark on the four-hour chart could indicate a bullish turn in BTC price, according to crypto analyst Trader Alan.

"This breakout is associated with 'higher lows into the resistance' pattern and [relative strength index] RSI breakout simultaneously," Trader Alan explained. "This tells us the buying power has developed and a strong LTF bottom has formed. This leads to further bull run."

Weekly Close Above Resistance

As Bitcoin price achieved a weekly close above the critical $66,600 mark, it serves as the primary resistance level for BTC, according to popular analyst Rekt Capital.

"Bitcoin is currently in the process of trying to perform this reclaim," Rekt Capital stated. "A successful reclaim here would enable BTC for a move towards $67,150, which would be the next reclaim BTC would need to make successful for price to revisit the $69,000 via the green path."

MVRV-Z Metric Resets

Following the recent correction, Bitcoin's MVRV Z-score, a technical indicator used to determine whether an asset is overbought or oversold, experienced a healthy correction, dropping to 2.08 on April 17. This suggests that Bitcoin is no longer overbought, according to LookIntoBitcoin.

"Bitcoin MVRV Z-Score has once again had a mid-cycle pause between 2 and 3," said Philip Swift, founder of LookIntoBitcoin. "The cooling off over the past month has been very healthy, and similar to previous cycles."

Confirmation Needed Despite Positive Momentum

Despite the positive price action this week, it is premature to confirm the end of the ongoing correction due to the reduced market depth, which could lead to increased price volatility, according to Jag Kooner, Head of Derivatives at Bitfinex.

"While we broke out of our lower timeframe range, it is important to remember that after a mass liquidation event amounting to over $2 billion in liquidations in 2 days starting April 12th, the market depth is considerably lower than a few weeks ago," Kooner said. "This means there is a lower open interest and fewer spot orders, so it's easier for smaller orders to move the market."

Kooner remains optimistic about Bitcoin's price action in the short term, but cautions that another potential liquidation event could occur as more leverage re-enters the markets.

Reclaiming $69K Crucial for Breakout Confirmation

To definitively confirm a surge towards new highs, Bitcoin must first surpass the $69,000 mark, according to Haralampiev of Nexo.

"Key levels to confirm the bullish sentiment and price movement are in the $69,000 – $70,000 bracket," Haralampiev explained. "Eventually, price action above these levels could lead to an attempt from BTC to break out to all-time high levels, should market sentiment and positioning continue to intensify."

Bitcoin faces significant resistance at the $67,000 mark, with over $553 million worth of cumulative short-leveraged positions across all exchanges. A potential move above $69,000 would liquidate more than $1.12 billion worth of short-leveraged positions, according to Coinglass data.

Disclaimer

This article does not provide investment advice or recommendations. All investments and trading decisions involve risk, and readers should conduct their own research before making any financial decisions.