Bitcoin is currently trading above $61,000, maintaining a short-term recovery. However, there are concerns that the price could approach the $64,650-$65,550 range, potentially trapping late buyers before a decline back towards $59,900-$60,900.

Current Market Dynamics

The cryptocurrency has shown stability above the $61,000 mark, recovering from lows seen in late June. Analysis indicates that Bitcoin is holding above the critical support level of $60,876 after rebounding from a lower base around $58,115. Although momentum appears to be improving, the price remains beneath the declining moving average between $64,000 and $65,000.

Success in reclaiming this moving average could signal a shift in market structure, potentially paving the way for Bitcoin to test the $67,000-$68,000 resistance area. According to analyst Michaël van de Poppe, the macroeconomic environment is mixed; rising oil prices add pressure while declining Japanese bond yields might provide some support for risk assets. This interplay could lead Bitcoin to trade sideways until a clearer market direction emerges.

Potential Price Movements

Bitcoin is preparing for a possible short squeeze after the market absorbed selling pressure around $62,000. A move into the liquidity zone of $64,650-$65,550 could occur before a reversal to lower support levels. The chart indicates clear liquidity at $64,658, which could trigger short position liquidations and attract momentum buyers.

Nevertheless, this anticipated rise is categorized as a liquidity sweep rather than a confirmed bullish breakout. Should Bitcoin face a quick rejection and drop below $64,658, the risk of another downturn increases. The first significant support level to watch is around $61,245, which represents the lower boundary of the current range.

If this support level fails, Bitcoin could plunge into the broader demand zone between $59,900 and $60,900, as outlined in the analysis. Additionally, a larger correction towards the low $50,000 range could materialize later in July or early August, should Bitcoin lose its current demand zone and continue to form lower highs.

However, the bearish scenario could weaken if Bitcoin manages to surpass $65,553 and sustain trading above this level. In such a case, the liquidity sweep might evolve into a genuine breakout instead of the anticipated bull trap.

This material is informational and should not be considered financial advice.