Bitcoin (BTC) price action turned short on Tuesday as market participants reacted to US President Donald Trump’s comments on the Iran war.
Key considerations:
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Bitcoin order book liquidity increases as BTC price climbs to $71,000.
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Market participants expect liquidity to increase to $72,000 in the future.
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BTC price momentum is improving with rising spot volume and strong ETF inflows.
Liquidity clusters form the BTC price display
Data from TradingView showed BTC/USD on Bitstamp at around $70,780, up 4.5% over the past 24 hours.
As the BTC price recovered as shorts were liquidated, orders were stacked both above and below the spot price, setting the stage for the next liquidity draw.
“$BTC surged past $70,000 yesterday, wiping out $186 million worth of shorts in the last 24 hours!” In a note on Tuesday, analysts at CryptoReviewing X.
related to: Will Bitcoin follow oil’s historic rally to reach $79,000 by the end of March?
The breakout heatmap shows that the $70,000-$72,000 supply zone has thinner liquidity that can be easily cleared, potentially leading to a large cluster at $74,000-$75,000.
However, with larger clusters below, after pocketing $72,000, the price has a better chance of falling below $70,000.
“Meanwhile, below $64,000 to $68,000 we have large liquidity clusters with almost 4 times more liquidity and this is the ‘most likely’ area to visit from a liquidity perspective,” the analysts said, adding:
“The goats were just stressed.”
On the downside, CoinGlass noted the “biggest breakout cluster” above $74,000 to $75,000 on the weekly time frame.
Bitcoin price flashes “positive” recovery signals
According to Glassnode, bitcoin price momentum has stabilized over the past week, with the 14-day relative strength index (RSI) reaching 52 on Tuesday, March 30.
The rising RSI “suggests modest improvement in BTC momentum,” Glassnode said in its latest Weekly Market Pulse report, adding that the move higher “suggests strong buyer activity.”
Spot demand is back and BTC trading volume has increased to $9.3 billion at the time of writing from $3.38 billion on Saturday, representing an increase of over 140%.
Spot Bitcoin ETF performance remains an area of relative strength, with net income accelerating to $934 million and trading volume rising to $23.1 billion from $16 billion last week.
The strength of imports “points to robust institutional demand and continued traditional financial cooperation,” Glassnode added.
Demand for spot ETFs continued at the start of the week, with these investment products attracting $167 million in net inflows on Monday. Meanwhile, global Bitcoin investment products generated $521 million in net income, contributing to BTC’s upward momentum.
Crypto investor and analyst CW8900 said that “net buying” is occurring across all major exchanges, which is a “positive signal of real buying demand.”
As Cointelegraph reported, Bitcoin ETFs recorded positive net inflows over the past 30 days, while gold ETFs saw record outflows over the same period. This could be a sign that capital is shifting from gold to Bitcoin.
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