Bitcoin Price Prediction: Potential Move to $85K Ahead as Positive Momentum Builds Up

Bitcoin (BTC) has gone up by 3.3% in the past 24 hours and is once again rising above the $70,000 mark ahead of tomorrow’s February inflation report from the United States.

The war with Iran seems to have aided BTC’s recovery recently, as the price bounced off a strong floor at $65,000 during the weekend and is now tagging a key resistance level that could trigger a much stronger relief rally if bulls manage to break past it.

Trading volumes have jumped by 23% in the past day, indicating that buying pressure is steadily rising as BTC hits this key resistance at $72,000.

Market Sentiment Improves, BTC Inflows Rose to $568M Last Week

Last week, investors poured $568 million into exchange-traded funds (ETFs) linked to the top crypto, further confirming that market sentiment is improving.

This week started with a positive note as well, as these ETFs brought in $168 million in capital yesterday.

Meanwhile, the Fear and Greed Index also moved out of “panic” territory, rising from a recent low of 5 to 26 at the time of writing.

Crypto Fear and Greed Index – Source: CoinMarketCap

Investors seem to be much more confident that the worst of the sell-off is behind them at a point when rising geopolitical tensions are causing all sorts of mayhem.

Short liquidations have also been spiking to nearly $400 million in the past three days. This is an early indication of a short squeeze in the making that could accelerate if BTC rises above the $72,000 threshold.

Bitcoin Could Rise to $85K If This Happens

Heading to the 4-hour chart, we can see that BTC is still confined within a tight range.

However, we finally saw the top crypto breaking past the 21-period exponential moving average (EMA) – a key line tracked by our signals system that helps us identify early indications of a trend reversal.

BTC/USDT 4H Chart – Source: TradingView

The Relative Strength Index (RSI) in this lower time frame also sent an early “buy” signal as it rose above the 14-period moving average while it briefly spiked above 60.

This is an indication that bullish momentum is accelerating. Hence, if we get another breakout above $72,000, another short squeeze could unfold. If that happens, it is highly likely that we’ll get a strong relief rally to $85,000.

The last time we got a breakout, a sell wall quickly formed near the $74,000. That would be the second resistance level to watch in case of another breakout.

The American session will likely bring the necessary volumes to the table to either push BTC through those ceilings or confirm a rejection. If the latter occurs, we could see a strong correction toward $65,000 first and then to $62,000 if bearish momentum accelerates.

Still Waiting for a Signal to Confirm Bitcoin’s Next Move

Moving to a lower time frame, the hourly chart shows that selling pressure is mounting during the American session already.

BTC/USDT 1H Chart – Source: TradingView

If we get a “sell” signal from our system during this session, this could confirm a rejection of the $72,000 resistance. However, it is still too early to tell.

The last signal was a “buy” at around $70,000. However, we prefer signals that pop up near key areas. Hence, we would love to see a breakout above $72,000 accompanied by one of these “buy” signals to confirm that BTC is getting ready to move to higher ground.

In contrast, if we get a sell signal at this level, it could also open up an interesting opportunity to short sell the token.