Bitcoin continued to fight for key resistance at the $35,000 level on Wednesday, but analysts are warning of the risks of a price correction.
According to analysts, BTC's recent movements are indicative of a bullish market trend, but investors should be cautious given the possibility of a correction due to the rapid increase in Bitcoin's value over a short period of time.
Currently, the BTC market is dominated by buyers who are pushing the price closer to the crucial resistance level of around $35,000. The RSI indicator also shows increased buying pressure.
If the buyers manage to secure the key level of $35,000, it will create additional impetus for further growth of the asset in the medium term.
At the same time, further growth of the largest cryptocurrency is also indicated by the increased liquidity of BTC.
"The early signs of liquidity in this rally are encouraging," said David Lowant, Head of Research at FalconX.
"Strong liquidity trends are an important signal confirming that the current price recovery is sustainable," he added.
Bitcoin surged 27% in October as traders bought the asset en masse amid enthusiasm for Bitcoin ETFs. This factor created a strong backdrop for the price to continue moving towards $40,000.
"October's breakout to a new yearly high has opened the door for the next major leg higher, targeting a measured move around $40,000 in the coming weeks," said Joel Krueger, Market Strategist at LMAX Group.
In addition, Bernstein's latest forecast suggests that the price of Bitcoin could reach $150,000 in 2027.
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Currently, the price of Bitcoin is up 0.45% to $34,371.95.
The next resistance level is at $34,650. At the same time, there is still strong resistance at $34,750, and the key level is $35,000.
A consolidation of the BTC price above $35,000 will allow the asset to start a strong rise towards the $35,500 level, which, if overcome, would create bullish momentum to move towards $36,000 and higher.
However, if Bitcoin fails to overcome the $34,650 level, it could begin a downward correction and fall to the $34,000 support area, the breach of which would open the way to $33,500.
See also: Bittrex receives court approval to close U.S. operations.