According to analyst Josh of Crypto World, Bitcoin is currently experiencing a bullish divergence while the one indicator is crashing, which points towards imminent liquidations—but this time to the upside. However, he said that the German government is running out of Bitcoin, currently holding less than 4,000 BTC worth a little over $200 million. Given their recent selling rates, they might exhaust their Bitcoin reserves soon.
Balancing this selling pressure, there have been significant inflows into spot Bitcoin ETFs. On Thursday alone, there was a net inflow of around $79 million. Although these inflows have been declining throughout the week—from nearly $300 million on Monday to $79 million on Thursday—overall, the ETF inflows are helping offset the selling pressure from the German government, keeping the market relatively neutral.
Analyzing the Bitcoin charts, he said that Bitcoin has not yet confirmed a bearish reversal. For this to happen, Bitcoin would need to close below $55.8k for four consecutive days. Currently, Bitcoin is holding above this level, indicating it is still within a larger bullish trend. He cites past instances, such as in August and March 2023, where Bitcoin briefly dipped below the trend indicator but did not confirm a bearish reversal.
Additionally, the DXY crashing is a bullish signal for Bitcoin. Historically, when the DXY is bearish, Bitcoin tends to be bullish about 90-95% of the time. Currently, as the DXY pulls back, it signals bullish momentum for Bitcoin.
He expects either a slight bullish relief or choppy sideways price action for the remainder of the week, potentially extending into the next week. The support levels for Bitcoin are $56k-$57k and $51k-$53k. Finally, the Bitcoin liquidation heat map shows that after recent liquidations at around $56.6k-$56.8k, the next major liquidation zone is between $59.8k and $60k.