3 Reasons Why Bitcoin Price Rally is Not Over Yet

Key Insights:

• Bitcoin Price Hits $122K, Yet Liquidity Gaps Hint at More Upside.
• BTC price Still Trading in the Lower Half of Its Historical Channel.
• Bullish RSI Pattern Mirrors Previous Mega Rallies.

Bitcoin just hit a new all-time high. It touched $121,000 and is now trading a little above $122,000. That’s a big deal, but some traders and analysts think this isn’t the end. In fact, they believe this could be just the start of a much bigger move.

Let’s look at three simple reasons why some people think the real bull run is only beginning now.

Bitcoin Price Still Has a Lot of Room to Grow

There’s a chart that shows how Bitcoin usually grows over the years. It’s like a big tunnel where the price moves up and down inside it.

Even though $122K is a new record, Bitcoin is still near the bottom part of that tunnel. In the past, when Bitcoin really exploded, it moved to the top part of that tunnel, and that’s when the crazy gains happened.

So even though we’re at the highest price ever, compared to how high Bitcoin has gone in past bull markets, we might still be early.

The RSI Chart Looks Bullish

RSI is short for Relative Strength Index. It’s a tool that tells us if people are buying too much or selling too much.

When the RSI goes really high, it usually means the coin is overbought; too many people bought it too fast. That often means a correction is coming.

Right now, as mentioned by Bitcoin analyst AO, Bitcoin’s RSI is going up, but it’s not too high yet. In fact, this kind of slow and steady move in the RSI looks a lot like what we saw before the big 2021 bull run. It tells us people are buying, but the rally might still have energy left. That’s a good sign.

A Lot of Traders Could Get Liquidated Above $120K

Here’s where it gets interesting. Some traders are betting that Bitcoin will fall. They are using something called leverage, which means they’re borrowing money to bet against BTC.

If Bitcoin goes up instead, they start losing money fast. If it moves too high, they get liquidated, which means their trades get forcefully closed. But that’s not the fun part.

Shorts getting liquidated can have a positive domino effect on the prices, as that would mean automatic BTC purchases to offset the shortfall.

DaanCrypto, a well-known trader, shared a heatmap showing that there are a lot of these traders between $120K and $125K. That area is full of what we call liquidity clusters.

If Bitcoin keeps pushing up, all of these traders might get squeezed out. That creates even more buying, which pushes the price higher, kind of like lighting a fire under a rocket.

Is This the Top for Bitcoin Price?

It might feel like we’re at the top; after all, $122,000 is a huge number. But when we look at these charts and signals, things don’t really look “toppy” yet.

The big price tunnel still has space to the upside. The RSI is rising, but not overheating. And there’s fuel above us in the form of liquidations. All of that tells us the move might not be done. In fact, the biggest push could still be ahead.

The BTC price chart also suggests the same. Per the Trend-based Fibonacci extension indicator, BTC is currently trading above the key resistance of $121,623. As that got breached, a move towards $136K also looks possible.

A more bullish target would be $160K, which also looks possible with this chart in play. However, a move under $112K can invalidate the bullish trend.