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Bitcoin rockets powerful spike
Bitcoin’s price has seemingly spiked out of nowhere in what has been in one of its strongest moves in days. With Bitcoin’s price suffering from sector volatility, it and most other cryptocurrencies has seen an aggressive sell off. This current rise in price is threatening to test the upper resistance point of the price range.
Synopsis of the price action
The price of Bitcoin had been building and consolidating towards the base of its range before today’s sharp pump in price. After testing the bottom twice and failing, the price made its way back to the top. The jump in price seems to have been supported by a potential ‘Short Squeeze’. A short squeeze occurs when large short positions attempt to close their positions at the same time. This drives the price of the asset higher forcing more shorts to close and creating a snowball effect. As stop losses become triggered the price receives a further boost. This means that a short squeeze generally results in higher volume and higher volatility then other momentum breaks outs.
As it can be seen in the chart below the price moved almost 400 dollars in 15 minutes which is a super powerful jump. The short-term target of $17,100 was touched, which is the top end of the range. The resistance level has proven once again to be too strong and therefore may require a retest and larger volume to break. However, if it can break through the next target becomes $18,100 which provides a great potential risk/reward.
With the fallout from FTX and other Cryptocurrency entities still facing bankruptcy and severe public distrust it will likely take some extremely positive news for the price to break out of the long-term range. Until then it would be wise to be weary of breakouts.
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