Bitcoin's $85,800 Level Crucial as Traders Set Orders

Bitcoin (BTC) has recently shown significant activity around the $85,800 price point, with on-chain data suggesting that this level is a critical juncture for traders. The substantial liquidity at this price indicates that many traders have set stop or limit orders, which could influence the market's direction. This level has become a focal point for both bullish and bearish movements, as traders anticipate potential breakouts or corrections.

According to CoinGlass, the $85,800 level remains crucial for Bitcoin price action since much liquidity is concentrated around it. The significant liquidity around the $85,800 level suggests activity at this point, where traders may have set stop or limit orders. This might result in a scenario where the market moves toward this level to trigger orders and generate momentum. A liquidity hunt might be watched for, a scenario where the market "flushes out" leveraged positions, particularly longs or traders speculating on price increases. In a separate tweet, CoinGlass pointed out high-leverage liquidity, citing the 24-hour BTC Liquidation Heatmap.

With Bitcoin trading just below this price point, a move toward $85,800 could trigger a bullish breakout if BTC clears the level with significant volume, potentially pushing the price to new highs. Alternatively, it can act as a trap if bears enter to defend the zone, resulting in rejection and a short-term correction. In any case, $85,800 is shaping up to be an inflection point for Bitcoin’s price, given the significant liquidity at this level.

Bitcoin price action has been volatile, with the cryptocurrency recently falling to $83,010 as investors digested conflicting signals. At press time, BTC was down 0.48% in the last 24 hours to $84,393. CryptoQuant examines Bitcoin’s price action using the Perpetual-Spot Gap, which estimates the difference between Binance’s perpetual futures price and the spot price of BTC. It provides a clear picture of trader sentiment: a negative gap frequently indicates caution, while a positive gap suggests increasing optimism. Currently, the gap is negative, signaling selling pressure on futures markets. However, there is good news: the gap is narrowing. This could be one of the first indications that bearish sentiment might be fading.

However, to determine Bitcoin market direction, traders should consider volume, macro context and other indications. The price of Bitcoin has been on an upward trajectory, recently surpassing the $82,500 mark and consolidating gains. The cryptocurrency has shown resilience, trading above key support levels and the 100 hourly Simple Moving Average. A break above a connecting bearish trend line with resistance at $84,500 on the hourly chart of the BTC/USD pair further supports the bullish sentiment. If Bitcoin can clear the $85,500 resistance zone, it could potentially test higher levels, with the next key resistance at $85,850 and further resistance at $86,500. A close above $86,500 might send the price even higher, potentially testing the $88,000 resistance level.

However, if Bitcoin fails to rise above the $85,500 resistance zone, it could face a downward correction. Immediate support on the downside is near the $84,200 level, with the first major support at $82,200. Further declines could see the price testing the $81,200 zone and potentially dropping to the $80,500 support level. The main support sits at $80,000, which could act as a critical level for bulls to defend.

Technical indicators also support the bullish outlook, with the MACD gaining pace in the bullish zone and the RSI for BTC/USD above the 50 level. These indicators suggest that the upward momentum is strong, but traders should remain cautious as the market approaches key resistance levels. From a midterm perspective, traders should focus on the weekly candle closure. If the weekly candle closes near $88,000 with no long wick, it would indicate a strong bullish move. This could further validate the upward trend and potentially drive the price higher in the coming weeks. However, traders should also be prepared for potential volatility and be ready to adjust their strategies accordingly.