Bitcoin (BTC) experienced a rebound on Tuesday, bouncing back from a three-month low with a $1,000 surge. However, the cryptocurrency still faces key resistance at the $26,000 level. The rebound came after Bitcoin's worst performance since mid-June when it briefly dipped below $25,000 during Wall Street's opening on Monday.
On-chain monitoring resource Material Indicators had previously warned that Bitcoin would face a "support test" due to the removal of bid liquidity further down the order book. Despite this warning, preemptive analysis by Material Indicators and others suggested that previous support "rug pulls" ultimately led to an upside in the Bitcoin market, with large-volume traders clearing liquidity from around the spot price.
Keith Alan, co-founder of Material Indicators, predicted that $24,750 would hold as support during the downward move. This prediction held true at the time of writing. Following the recovery, popular trader Skew referred to the situation as a "textbook short squeeze" and called for bulls to overcome the $26,000 resistance.
Data from monitoring resource CoinGlass showed total BTC short liquidations reaching just over $12 million on Tuesday. In contrast, Bitcoin longs suffered losses of $71 million on Monday, highlighting ongoing volatility in the cryptocurrency market.
Credible Crypto, another popular trader, remained optimistic about Bitcoin's future price movements. He noted a potential breakout in Bitcoin's market cap dominance, which could act as a precursor to the next bullish price move. His analysis highlighted a local dominance downtrend being tested — an event last seen in mid-June that sparked gains of over $7,000 over two weeks.
"With bullish market structure intact on BTC, 24.8k held, and BTC dominance breaking out, I think there is a decent argument to be made that our next impulse is just around the corner," Credible Crypto said.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.