Key takeaways:

Bitcoin order book liquidity is increasing as BTC price rebounds to $71,000.

Market participants anticipate a liquidity grab toward $72,000 next.

BTC price momentum improves, with rising spot volume and strong ETF inflows.

Liquidity clusters set up BTC price showdown

Data from TradingView showed
BTCUSD
hovering around $70,780 on Bitstamp, up 4.5% over the last 24 hours.

With BTC price recovering while liquidating shorts, orders were being stacked both above and below the spot price, setting the stage for the next liquidity grab.

“$BTC pumped above $70,000 yesterday, liquidating $186M shorts in the past 24 hours!” analysts at CryptoReviewing said in a Tuesday post on X.

The liquidation heatmap shows that the $70,000-$72,000 supply zone has thinner liquidity that could easily be swept, potentially leading to the next big cluster at $74,000-$75,000.

However, with bigger clusters below, the price has a better chance of dipping below $70,000 after the $72,000 pocket gets filled.

“Meanwhile, below at $64,000-$68,000 we have large liquidity clusters, totalling roughly 4x more liquidity, making this the 'more likely' zone to visit next from a liquidity perspective,” the analysts said, adding:

“Bulls just applied the pressure.”

Zooming out, CoinGlass highlighted the “largest short liquidation cluster” sitting higher up between $74,000 and $75,000 on the weekly time frame.

Bitcoin price flashes “positive” recovery signals

Bitcoin price momentum has firmed over the past week, with the 14-day relative strength index (RSI) rising from the recent lows to 52 on Tuesday from 30 on March 1, according to data from Glassnode.

The rising RSI “signals a modest improvement in BTC momentum,” Glassnode said in its latest Weekly Market Pulse report, adding that the move higher “points to high buyer activity.”

Spot demand is returning, with BTC trading volume rising to $9.3 billion at the time of writing from $3.38 billion on Saturday, a more than 140% increase.

Spot Bitcoin ETF activity remains a relative area of strength, with net inflows accelerating to $934 million, and trading volumes rose to $23.1 billion from $16 billion last week.

The strength of inflows “points to sustained institutional demand and continued traditional finance engagement,” Glassnode added.

The demand for spot ETFs continued at the start of the week, with these investment products attracting $167 million in net inflows on Monday. Meanwhile, global Bitcoin investment products logged $521 million in net inflows, contributing to BTC’s upside momentum.

Crypto investor and analyst CW8900 said that “net buying” was occurring across all major exchanges, a “positive signal of actual buying demand.”

As Cointelegraph reported, Bitcoin ETFs recorded net positive inflows over the past 30 days while gold ETFs saw record outflows over the same period. This could be a sign that capital is rotating from gold into Bitcoin.
source: https://www.tradingview.com/news/cointelegraph:caced33f7094b:0-bitcoin-price-analysis-warns-of-potential-dip-after-72k-liquidity-sweep/