Bitcoin bulls target $35K amid looming liquidity crisis

Bitcoin (BTC) has shown signs of strength in the past few days, breaking above the $30K resistance and reaching as high as $34K on some exchanges. Analysts are now eyeing the $35K level as a key target for the bulls, as it could trigger a ‘massive’ liquidity squeeze and propel BTC to new highs.

Why $35K is important for BTC

According to data from Glassnode, a significant amount of BTC supply was last moved between $31K and $34K. This means that many investors bought or sold their coins in this range and are likely to defend their positions if the price revisits this zone.

However, if BTC can break above $35K, it would invalidate many of these positions and force the sellers to cover their losses by buying back their coins. This would create a positive feedback loop of buying pressure, also known as a ‘short squeeze’, that could push BTC to higher levels.

What are the chances of a BTC breakout?

While there is no guarantee that BTC will break above $35K, some factors support this scenario. The market sentiment has improved significantly in the past week, as evidenced by the Crypto Fear & Greed Index, which rose from 10 (extreme fear) to 50 (neutral) in just seven days.

Additionally, the on-chain activity of BTC has also increased, indicating more demand and usage of the network. According to Glassnode, the number of active addresses, transactions, and transfers has spiked in the past week, reaching levels not seen since May.

Finally, the technical indicators suggest that BTC is gaining momentum and could challenge the $35K resistance soon. The daily RSI is above 50, indicating bullish momentum, while the MACD has crossed above zero, signaling a bullish trend change.

BTC price targets fix on $35K as Bitcoin eyes ‘massive’ liquidity squeeze that could propel it to new highs. The market sentiment, on-chain activity, and technical indicators support this bullish scenario. However, BTC still faces challenges, such as regulatory uncertainty and competition from other cryptocurrencies. Therefore, investors should be cautious and use proper risk management when trading BTC.