- Analyst expected a likely BTC breakout and rally towards $75K-$80K.
- A recovery in investor demand supported the outlook, but increasing 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 Stock money lizardthe range can happen in two weeks. If so, the analyst predicted that BTC could hit $75K-$80K if the recent dip 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.”
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.
Increasing demand vs. risk
Investor appetite for the world’s largest digital asset also improved, suggesting a slow but steady recovery in demand in Q4 compared to Q2/Q3. quarter.
For perspective, BTC demand has been negative since May, with sales outpacing purchases. However, CryptoQuant noted that the pace of the imbalance has slowed.
In fact, the apparent demand for BTC measured over the past 30 trading days indicated that investor demand was hitting levels last seen in May.
About 150,000 BTC, worth approximately $9.4 billion, was snapped up by investors between late September and mid-October.
Therefore, if the pattern extends for the next two weeks, the rising demand could support Stockmoney Lizards’ breakout projection.
But increasing leverage, as indicated by a rise in Open Interest (OI), also posed an imminent pitfall to the breakout expectation.
For the uninitiated, increasing leverage meant that 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).
However, the analytics firm also noted that the drop in OI did not exceed 5%, a level that historically always saw an extended BTC rally if hit.
In short, increased volatility and liquidation risks on both sides of the price direction can derail the expectation of a breakout.
Meanwhile, BTC was valued at $62.8K and consolidated below the 200-day moving average (MA) at press time.