Bitcoin Surges Past $80,000, Eyes $95,000 on Lower CPI Data

Bitcoin has recently surged past the $80,000 mark, reigniting bullish sentiment among traders who are now eyeing a potential breakout at $95,000 by the end of the month. This optimism is fueled by the lower-than-expected U.S. Consumer Price Index (CPI) data released on March 12, which stood at 3.1%. This data has shifted the odds in favor of Bitcoin, as it indicates a potential easing of inflationary pressures, which is generally positive for risk assets like cryptocurrencies.

However, the path to $95,000 is not without its challenges. There is a significant concentration of short positions, totaling over $300 million, between $84,000 and $85,000. If Bitcoin manages to break through this resistance level, it could trigger a short squeeze, potentially driving prices up by as much as 12%. This scenario is supported by historical data, which shows that every gap in the CME Bitcoin futures market over the past four months has been filled, suggesting that the $85,000-$86,000 gap could be the next target.

Bitcoin has been testing the $84,000 to $85,000 resistance level for days, with a major buildup of short bets in this range. If Bitcoin clears this level, the panic from liquidating shorts could send prices soaring. The lingering CME Bitcoin futures gap at $85,000-$86,000 adds to the anticipation, as history suggests that every gap in the last four months has been filled, indicating another breakout is likely.

The battle for Bitcoin's price direction is playing out on major exchanges. Traders on one exchange have been selling Bitcoin, particularly when it dipped to $76,650. In contrast, buyers on another exchange have been stepping in to support the price, pushing it back above $80,000. This tug-of-war between sellers and buyers could create volatility as Bitcoin approaches the $90,000 mark, where another significant amount in short positions are at risk of liquidation.

Analysts are divided on whether Bitcoin will continue its upward trajectory or face a correction. One analyst believes that Bitcoin is still moving "correctively," suggesting that more sideways action could be in store before a real breakout. On the other hand, another analyst warns of potential "distribution" around $85,000, indicating that a fakeout could trap overzealous buyers before any significant rally begins. This uncertainty adds to the complexity of predicting Bitcoin's next move, as traders brace for either a breakout to $95,000 or a potential pullback.