Will Bitcoin move sideways below $70K in this setup?
Bitcoin (BTC) traded in a tight 65,000-$70,000 range on Wednesday, a structure it has held for the past two weeks.
The lower time frames show significant divergence, indicating that short-term selling pressure is fading, while futures data indicates long positions opened above $66,000.
Analysts say the squeeze could be ahead before a breakout test, with liquid concentrations below $66,000 and above $71,000 being zones that could determine the next directional move.
Bitcoin's high divergence is near the support level.
On the hourly chart, Bitcoin is descending similar to last week's structure before moving towards $70,000. A clear bullish divergence has formed on the Relative Strength Index (RSI) in this channel.
A bullish divergence occurs when the RSI prints higher lows when the price breaks below the low or equal. This sequence shows that selling pressure is losing strength in the short term.
A sustained break above $68,000 could confirm momentum, leading to a price rally above $71,500 to external liquidity and resistance levels.
The breakeven level is set below $66,000, with internal liquidity around $65,000. A break below that range will devalue the divergence setup and shift focus to the upper-time-frame support range between $62,000 and $60,000.
Initial data showed total open interest rose 3 percent to $15.50 billion from $15.10 billion in the previous two days, despite lower rates.
The aggregate funding rate rose to 0.046%, indicating long-term exposure for futures traders.
As of February 15, nearly $250 million in cumulative long liquidations have occurred, forcing potential positions to close below $67,000. These long-term sell-offs reduce profits, which can stabilize prices and create better conditions after traders rejoin the market.
Related: Bitcoin's tech stock divergence is a ‘fire alarm' for fiat: Arthur Hayes
Future momentum and macro positioning
Crypto analyst Amr Taha noted that the 30-day volatility of Binance Bitcoin Futures, which tracks the net change in price, currency and open interest, has dropped significantly. The index dropped to -0.18, corresponding levels seen between last April and May 2024.
Taha said this could be a sign of a reversal for BTC, as similar deep negative readings between April and May 2024 could push Bitcoin above the $100,000 level, with the index turning positive in the latter half of 2024.
Meanwhile, crypto analyst Dom's spot order books show thin liquidity between $66,000 and $69,000, neutralizing the current move, suggesting BTC price is bullish ahead of a breakout test.
Liquidity heatmaps shared by BTC trader Daan show dense clusters of liquidity below $66,000 and above $71,000, indicating areas where stop orders and landing positions may be in focus.
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