Bitcoin needs weekly close above $79,600 to confirm squeeze rally

Bitcoin needs a weekly close above $79,600 to flip Bitfinex's SuperTrend bullish, the confirmation still pending after the record $1.1 billion short squeeze.

"SuperTrend is built around volatility rather than time, using Average True Range to position a line above or below price," Bitfinex said in its Chart Decoder series, noting the indicator widens automatically as volatility rises so a fast-moving trend gets more room before being declared broken.

On the weekly chart from Sept. 1, the line sat near $79,600 with Bitcoin trading less than $1,000 below it, leaving the bearish signal intact even after price traveled thousands of dollars off its August lows. The daily SuperTrend had already turned bullish near $72,279, with Bitcoin around $78,875 — a split that shows short-term strength without longer-term confirmation. Bitfinex said comparing the two timeframes helps traders separate an early trend change from a durable move.

A weekly close above $79,600 would shift the line beneath price and confirm the reversal; failure keeps the bearish signal. The test follows the Aug. 19 breakout that ended a ten-week range between $62,000 and $66,000 and drove Bitcoin toward $81,500 before hawkish remarks from Federal Reserve Chair Kevin Warsh pushed it back below $77,000.

The squeeze that started the move

Glassnode data shows the Aug. 19 breakout produced the largest single-day short liquidation event in its records since 2019, with roughly $1.74 billion in bearish bets forcibly unwound against $160 million in longs — shorts accounting for about 85 percent of forced closures. Another $1.22 billion in shorts were wiped out through Aug. 22 as cascading stop-losses extended the rally. U.S. spot Bitcoin ETFs absorbed more than $2.2 billion in net inflows in the week after the squeeze, the strongest weekly intake of the year, giving the move a second tailwind once forced buying faded. The breakout also lifted altcoins, with 19 of the top 20 tokens rising more than 12 percent between Aug. 18 and Aug. 25, outpacing Bitcoin's 21.4 percent gain over the same stretch.

$79,600 vs. the overhead shelf

The weekly confirmation level now competes with a wall of supply overhead. Glassnode estimates roughly 1.05 million bitcoin held by long-term holders sits in a cost-basis band between $83,000 and $86,000, a zone that will test whether patient investors sell near breakeven or hold. On the downside, short-term holder cost bases near $70,000 and the $62,000 to $65,000 support zone mark the key defense lines.

The timing adds risk. September is Bitcoin's weakest month on record — it has closed eight of the last 13 Septembers in the red, averaging a 2.97 percent loss — and the CME FedWatch tool prices a 64 percent chance the Fed hikes rates at its Sept. 15-16 meeting, a typically bearish backdrop for risk assets. Spot Bitcoin ETFs shed roughly $236 million on Tuesday alone. Traders have also flagged a "Bart Simpson" pattern from the sharp spike, flat top and partial giveback, with $75,800 the level that would confirm a bearish breakdown.

This article is for informational purposes only and does not constitute investment advice.