Bitcoin traders expect a return to swing highs after BTC price hits $42,000

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Bitcoin (BTC) price has broken through $42,000 for the first time in nearly seven days as the market recovers from the aftermath of the spot Bitcoin ETF-linked sell-off.

Data from Cointelegraph Markets Pro and TradingView shows Bitcoin climbed rapidly from a price of $39,545 on Jan.26 and gained 5% to trade at $41,973.

BTC/USD daily chart. Source: TradingView

Bitcoin’s price performance comes as the market experiences a slowdown in outflows for Grayscale’s GBTC spot ETF.

Data from BitMEX Research shows GBTC saw outflows of $394.1 million on Jan. 25, down from $429.3 million on Jan. 24 and $515.3 million on Tuesday, Jan. 23.

While the GBTC outflows remain very high, the Jan. 25 figure marked the second-lowest since spot Bitcoin ETF trading debuted on Jan. 11.

Senior Bloomberg ETF analyst James Sayfart posted a chart on X showing premiums and discounts for the Bitcoin ETFs compressing over the last 10 days, to which fellow analyst Eric Blachunas responded by saying it is a “beautiful sight.”

Independent market analyst Yakuza said that BTC has successfully set a trap for bears who were hoping to catch the price at $32,000. Yakuza added, “Late shorts already liquidated or about to.”

Related: Crypto exec sees ‘mid to low’ $20K BTC price before new all-time highs

In line with Yakuza’s observation, data from Coinglass shows short-position liquidations for Bitcoin topping $34.3 million on the day, with the tally expected to increase before the close of the day. Cross-crypto short liquidations amounted to more than $77 million.

Bitcoin total liquidations chart. Source: Coinglass

The current market trend is a cause for optimism among crypto investors and traders, who are hoping to see Bitcoin price benefit from the long-term impact of spot Bitcoin ETF trading.