Bitcoin (BTC) Price Might Not Be Ready for a Breakout Despite Recent Rally

Though the price of Bitcoin has been rising recently, a deeper look indicates that the market might not be prepared for a big breakout as the majority of investors are taking profits.

Despite the recent increase in the price of Bitcoin, a deeper analysis reveals that the market may not be primed for a substantial breakout, as the majority of traders are prioritizing profit-taking over entering the market. While Bitcoin has exhibited some bullish tendencies, the data suggests that a significant rally might not be on the horizon.

First, the market flow suggests that traders are more inclined to view the current price action as an opportunity to realize gains or to close long positions, rather than to initiate new positions. This is evident in the actions of traders closing long positions and spot traders taking profits at these points.

Such flow patterns typically take time to develop into a more structurally bullish trend, indicating that the market might not be prepared for an explosive move higher just yet. Furthermore, an understanding of the current market position necessitates an examination of the liquidity dynamics around $60,000 and $61,000.

It appears that sellers are hesitant to drive the price higher in the absence of strong buyer support because the ask liquidity at $60,000 was pulled just prior to a taker-driven pump. Further more, there is a substantial supply beginning at $61,000, which establishes a contextual barrier that the market may find difficult to overcome in the absence of stronger purchasing interest.

Another key aspect to consider is the positioning in the futures market. The perpetual futures data indicates that poorly positioned shorts may have been squeezed out even though the trend is still spot-driven, which is generally positive for the market.

However, there is a lack of formation of aggressive long positions, which usually signal strong confidence in a sustained upward move. It appears that there is buying but not enough to drive the price much higher at this time, based on the decline in open interest (OI) and the rising CVDs and delta. Finally, it is concerning that there have not been any limit bids since the $57,000 lows. A high-time-frame (HTF) rally would require additional support in the form of rising limit bids to give the price a more solid foundation upon which to rise.

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