Key points
– Two large upside liquidation zones sit near $116,800 and $119,000 and may act as price magnets in the days ahead.
– Bitcoin recently defended its 50-day exponential moving average on the daily chart, reinforcing a potential base for a rebound.
– Correlation with the S&P 500 remains elevated, keeping both assets sensitive to macro headlines and recession fears.
Bitcoin’s price has swung sharply again, briefly probing levels near its prior all‑time high before sliding to roughly $112,000 on the back of weaker-than-expected jobs data that reignited recession concerns. As of writing, the market has recovered toward about $115,470.
Trader and analyst CrypNuevo highlights two notable liquidity clusters at $116,800 and $119,000 that could pull price higher, potentially triggering a short squeeze. He notes the move could start from around the daily 50‑EMA area near $113,000 or from structural support closer to $110,000, while a deeper move below those levels looks less likely in his view.
The mechanics matter here. A short squeeze unfolds when price rises into zones with dense short‑seller liquidation orders. As those orders are triggered, forced buying accelerates the move upward, which can cascade into additional liquidations. The opposite dynamic—a long squeeze—occurs when price falls into concentrations of long liquidations.
Recent context supports this framework. On January 27, CrypNuevo flagged a downside liquidation pocket between $113,600 and $114,500, with heavier liquidity lower in the band. That long squeeze played out and extended to a test of the daily 50‑EMA, a level the analyst often tracks. Other major assets followed suit during the drop, with Ethereum also losing key supports. In a follow‑up, the analyst compared the latest reversal to January’s pattern but argued the present backdrop is different, with downside likely to stall near the 1D 50‑EMA rather than extend further as it did earlier this year.
Macro conditions remain the wild card. Bitcoin continues to trade with a strong positive correlation to the S&P 500, so surprise economic data can move both markets in tandem. The latest jobs surprise weighed on risk assets, but any shift toward a more supportive macro outlook—or other constructive headlines—could fuel a push into the $116.8k–$119k liquidity pocket. That area sits close to Bitcoin’s current record, so any squeeze through it could amplify volatility. Traders should be mindful that liquidity pools can cut both ways, and visible targets often attract “hunts” by larger players before the prevailing trend resumes.
Why the 50‑day EMA matters
– In established uptrends, the 50‑day EMA often acts as a dynamic support where pullbacks base before trend continuation. A clean defense of that level typically signals momentum is intact.
– A decisive loss of the 50‑day EMA would increase the risk of a deeper retest of structural supports, including the $110,000 region highlighted by the analyst.
What to watch next
– Price reaction near $116,800–$119,000: Acceptance above this band would confirm a successful sweep of liquidity and raise the odds of an all‑time‑high retest.
– The daily 50‑EMA and $110,000: Holding these areas keeps the bullish structure constructive; a firm break would warn of a slower recovery path.
– Macro catalysts: Labor data, inflation updates, and shifts in recession odds remain pivotal given Bitcoin’s tight correlation with equities.
Positive takeaway
Despite sharp swings, defending the daily 50‑day EMA suggests the broader uptrend remains resilient. If macro pressures ease, the nearby cluster of short liquidations could serve as a springboard for a squeeze toward the highs, potentially refreshing momentum for the wider crypto market.
Summary
– BTC rebounded after a jobs-driven drop, holding the daily 50‑EMA.
– Liquidity clusters at $116,800 and $119,000 may act as upside magnets and fuel a short squeeze.
– Correlation with the S&P 500 keeps macro headlines front and center.
– Key levels: $116.8k–$119k on the upside; $113k (50‑EMA) and $110k as supports.