This $25,000 BTC price target would mean misery for Bitcoin shorts

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Bitcoin (BTC) has an important new price target for the bulls to hit and it’s closer than it looks.

As noted by Philip Swift, co-founder of the Decentrader trading suite, $25,000 is now a critical BTC price level.

Bitcoin price rally close to ‘lots of cash’

After posting 40% gains in January, Bitcoin continues to consolidate around $23,000.

Opinions are divided as to what will happen next after more than a year in the bear market, with many market participants expecting a dramatic correction and even new multi-year lows of $12,000 or worse.

Others think the good times may continue and even see BTC/USD hit $30,000 before checking out its relief rally.

In the meantime, however, some are focusing on another line in the sand much closer to the current spot price.

For Swift, the area around $25,000 is now particularly important. This is where, he noted in a Jan. 24 tweet, bears begin to liquidate en masse.

It is also the site of Bitcoin’s 200-week moving average (WMA), a key trendline that has been absent from the chart since mid-2022, when it failed to act as support. Bitcoin has since spent a record time below the 200WMA, which currently sits at around $24,750.

There is plenty of liquidity between $24,700 and $25,900, which corresponds to 200WMA and the zone just above it, Swift commented.

BTC/USD liquidity chart (screenshot). Source: Decentralizer

Analysis of an attached liquidity chart shows that leveraged short positions will start to see liquidations once BTC/USD breaks above $23,400 so far, that’s exactly where the rally encountered momentum problems.

This level continues to act as resistance, trader and analyst Rekt Capital wrote in a commentary section on the topic, noting that Bitcoin’s last weekly close was also lower.

BTC needs to reclaim this ~$23,400 as support to move higher, otherwise there is a risk of a new lower high being formed from the 2022 summer highs.

Such a scenario would mean BTC/USD failing to reach its local highs from August, with those in themselves marking a brief respite in the 77% decline from all-time highs seen in November 2021.

BTC/USD annotated chart. Source: Rekt Capital / TwitterAugust 2022 highs keep bulls in check

Continuing, Rekt Capital drew attention to the fact that the summer highs also present a resistance zone on longer time frames.

Related:Bitcoin price remains near $23,000 as data shows hodlers not selling BTC

Analyzing the monthly chart in his latest YouTube update, he highlighted the need to break through this resistance, which continues to “reassert itself”.

“If this continues to be the case, then we might be bracing for a decline just to reaffirm this level as support,” he argued, referring to the monthly lows in the range, which Bitcoin lost thanks to the FTX debacle.

A short-term prediction suggested that “some consolidation could take place for as long as it takes before there is a breakout either side of the range.”

A trip below the low end of the range, added Rekt Capital, however, was not ruled out.

BTC/USD annotated chart. Source: Rekt Capital/Twitter

The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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