Key Points:
The profits near the range of Bitcoin range are consistent with traders’ previous reactions to the new all-time highs.
Soaking near major liquidation zones, consistent demand from institutional investors suggests that selling pressure will not last long.
Bitcoin (BTC)’s sudden sale from an all-time high of $124,474 initially seemed like a routine outcome. In particular, some of the traders are always profiting at the new best, and another group chooses to open shorts at the same time.
Addressing the recent sellouts, European research director Andre Dragosch said in posting the chart above,
“Note: Yes – we’ve seen an increase in profit acquisition (by short-term holders) recently, but they’ve also become smaller over time.”
That said, the 6.72% correction, below $115,000, is probably a little deeper than most expected, so some analysts expect it to drop further below $110,000.
In a comment to Cointelegraph, Shubh Varma, co-founder and CEO of Hyblock, explained:
“Last week we saw a clear pattern of liquidity dynamics driving Bitcoin weekend price action. Over the weekend, liquidity accumulated on the downside (Image 1), creating a visible pool of potential liquidation targets.
Varma said that at the same time these “liquidity grabs” were made, “supply began to appear in order books and Onchain.”
“A large ETH volatile events have been added to the available supply. However, demand from the Ministry of Digital Assets Treasury (DATS) remained strong on weekdays. Several agencies announced last week the purchases of major BTC and ETH that will not only meet this supply, but also help to promote an upside-down movement well beyond.”
Catch will close Wall Street over the weekend, according to Varma, “institutional demand appears to be draining, leaving order flow imbalances exposed.”
“I saw this in both the order book and slippage metrics (Image 3). Liquidity sat down, slippage surged, with both 1% and 2% bid depths bearded.
When asked how Bitcoin fell below $115,000 during Monday’s surprise and whether the additional downside was high, Varma said, sharing the following chart,
“A lot of open interest was opened around the same time that fluidity flowed. Both the long and shorts were opened there, and the shorts are now trapped, which serves as good support.”
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
