Here’s the risky aspect of short-term BTC breakout prospects…
- Analyst projected a likely BTC breakout and rally towards $75K-$80K. Recovering investor demand supported the outlook, but rising leverage could be risky.
Bitcoin [BTC] price charts indicated a potential market structure shift, signaling a likely breakout from the $50K-$72K price range that began in March.
According to analyst Stockmoney Lizards, the range breakout could happen in two weeks. If so, the analyst predicted BTC could hit $75K-$80K if the recent drop below $60K is defended as a ‘higher low.’
“If this higher low is confirmed, we will break this upper resistance within 2 weeks. $75-$80k next target.”
Source: Stockmoney Lizards
For context, BTC has been chalking higher lows since August, a price action trend that signals a potential market structure shift, especially if a higher high is fronted.
Rising demand vs. risk
Investors’ appetite for the world’s largest digital asset also improved, suggesting a slow but steady demand recovery in Q4 compared to Q2/Q3.
For perspective, BTC demand has been negative since May, with selling outpacing buying. However, CryptoQuant noted that the pace of the imbalance has eased.
Source: CryptoQuant
In fact, the apparent demand for BTC gauged over the past 30 trading days, indicated that investor demand hit levels last seen in May.
About 150K BTC, worth approximately $9.4 billion, was snagged by investors between late September and mid-October.
Source: CryptoQuant
Therefore, if the pattern extended in the next two weeks, the rising demand could support Stockmoney Lizards’ breakout projection.
But rising leverage, as denoted by an uptick in Open Interest (OI), also posed an imminent pitfall to the breakout expectation.
For the unfamiliar, rising leverage meant speculators took more risk by borrowing money to open BTC positions in the Futures markets.
According to Glassnode, the recent weekend pump from $58.9K to $63.4K, flushed some short-sellers ($2.5B in OI).
Source: Glassnode
However, the analytic firm also noted that the drop in OI didn’t surpass 5%, a level that historically always saw an extended BTC rally if hit.
In short, heightened volatility and liquidation risks on either side of the price direction could derail the breakout expectation.
In the meantime, BTC was valued at $62.8K and consolidated below the 200-day Moving Average (MA) at press time.
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