Bitcoin price rebounds amid potential short squeeze above $97,500
Bitcoin price action this week has been marked by a steady recovery from a two-week low near $93,400.
Today, Bitcoin found support at the weekly opening price of $96,200 during the Asian session, prompting a 1.1% extension of its rebound to a four-day high. However, in the European session, the price has pulled back slightly to $96,800, pausing its upward momentum.
Despite this recovery, Bitcoin remains confined within a bearish channel. The top trendline of this channel aligns with the 0.786 Fibonacci retracement level, creating a key resistance zone near $97,500. If Bitcoin fails to break above this level, further downside pressure could emerge. Meanwhile, the weekly opening support at $96,200 is reinforced by the 50 EMA on the intraday one-hour chart, making it a critical level to watch for potential price reactions.
Bitcoin price dynamics (Feb 2025). Source: TradingView.
Liquidation clusters near $111,000 hint at possible short squeeze
A closer look at liquidation data provides additional insight into potential price movements. A liquidation heatmap reveals significant clusters of leveraged positions at key price levels. Currently, billions of dollars in potential liquidations are concentrated near $111,000 on the upside, while a substantial liquidity block is present around $91,000. The deep liquidity on the higher end suggests that a strong relief rally could develop, forcing short positions to close in a cascading effect, potentially accelerating upward momentum if key resistance levels are breached.
Given these factors, Bitcoin’s near-term trajectory hinges on whether it can break through the bearish channel and challenge higher resistance levels. A sustained move above $97,500 could open the door for further gains, potentially triggering a short squeeze toward the high-liquidity zone near $111,000.
On the downside, failure to hold the $96,200 support may expose Bitcoin to further declines, with the $93,400 low from earlier this week coming back into focus.Traders will be closely monitoring Bitcoin’s interaction with these key technical levels, as well as broader market conditions, to gauge the strength of the current recovery.
Bitcoin price rebounds to $96K after 3-day losses as traders assess ETF flows. Coinbase Premium Index dropped sharply on Tuesday following the U.S. stock market open.
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