Jiang Zhuoer, the creator of the B.TOP mining pool, commented on Bitcoin’s potential short-term price fluctuations, suggesting that a major correction could occur following the liquidation of highly leveraged market positions.
Zhuoer believes that Bitcoin is likely to first clear a critical liquidation area above $76,000. Concurrently, Ethereum is predicted to approach its own liquidation zone near $2,665, which would trigger the liquidation of many short positions at elevated price levels.
Once Bitcoin surpasses the liquidity threshold above $76,000, Zhuoer identifies two possible scenarios.
In his first scenario, he notes that if Bitcoin manages to rebound without falling below $75,000, the price could potentially reach $80,000. He even suggests that it might test the robust resistance area between $83,000 and $84,000. However, Zhuoer warns that a significant correction may follow such an increase.
The second scenario posits that if Bitcoin drops below the support level of $75,000, a more profound correction could ensue, echoing the upward trend that began from $64,000. Zhuoer anticipates that in this situation, Bitcoin could decline to the $70,000-$72,000 range before entering a subsequent phase of the bull market.
Additionally, Zhuoer mentioned that the forthcoming vote on legislation next week, along with updates from the Federal Reserve, will play crucial roles in influencing market dynamics.
Given this level of uncertainty, Zhuoer has opted for a balanced trading strategy, maintaining a full short position in Bitcoin while holding a complete spot position in Ethereum.
*This is not financial advice.