Long Squeeze Fears Resurface with $60K Retracement on the Horizon

An analyst has observed that while Bitcoin is currently maintaining a bullish breakout on larger timeframes, short-term bearish divergence is beginning to take shape. This divergence signals a possible shift in momentum, with major liquidity building to the downside below the current price, hinting at a long squeeze.

Looking at the four-day Bitcoin chart, analyst Josh of Crypto World said that there hasn’t been much change over the past day. The Super Trend indicator remains in the red but could flip to green with a confirmed breakout and a candle close above approximately $71,500. Meanwhile, the three-day chart has already transitioned to green, suggesting a more positive outlook.

However, he said that as long as Bitcoin remains above the $66,000 mark, the overall price structure appears more bullish than bearish, despite any short-term pullbacks

Short-Term Price Structure

Bitcoin is holding above a previous resistance level, which is a positive sign in terms of larger price structure. A long-term bullish trend can still show short-term pullbacks, just as a bearish trend can have brief rallies. Currently, while larger time frames suggest a bullish outlook, smaller time frames show bearish tendencies.

Bitcoin is testing a previous resistance zone that could act as support, ranging from approximately $66,700 to $68,300. If this area holds, it would reinforce the bullish sentiment. However, if Bitcoin breaks below $66,700, further support is expected around $65,500 to $66,000, with additional support levels between $64,200 and $64,500.

Resistance levels to watch for potential upward movement include local highs near $69,500 and significant resistance at around $72,000 and $73,500, which correspond to all-time highs.

Understanding the Long Squeeze

The Bitcoin liquidation heat map reveals that liquidity is building to the downside between $66,400 and $66,500. With many new long positions being opened, a drop below $66,400 could trigger a liquidation event, potentially resulting in a long squeeze.