Bitcoin Rally Hits Resistance at $81K
Bitcoin's rally hit a wall at $81,000 after reaching its strongest level in three months. The cryptocurrency rebounded to an intraday high of $81,265 on Tuesday before retreating towards $79,000.
The rapid move was partly fueled by forced short covering, with about $6.4 billion of leveraged short perpetual positions liquidated during the rally. This automatic demand largely disappeared once those positions were cleared.
Analysts are warning that repeated failed breakouts can become difficult to dismiss. FOREX.com market analyst David Scutt highlighted overbought daily momentum, emerging bearish divergence in the relative-strength index and a bearish crossover in the four-hour MACD.
The bigger question concerns what powered Bitcoin into resistance. Charles Schwab head of crypto research Jim Ferraioli noted that short squeezes tend to be short-lived, while Bitget Research chief analyst Ryan Lee said the durability of the rally now depends on whether institutional buying continues after forced liquidations have cleared.