BTC price nears $26K amid warning Bitcoin sell pressure can ‘double’

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Bitcoin (BTC) stayed close to two-month lows on the Aug. 18 Wall Road open as markets got here to phrases with excessive liquidations.

“Drying liquidity” prices BTC worth key assist

Knowledge from Cointelegraph Markets Pro and TradingView confirmed BTC worth motion monitoring sideways after a single each day candle spawned 8% losses.

The most important cryptocurrency noticed a cascade of liquidations throughout derivatives markets, with these accounting for an “outsized” majority amid comparatively slack spot promoting.

“In Deribit it’s doubtless that a big account obtained wiped, contemplating the immense quick liquidation that occured collectively,” buying and selling agency QCP Capital wrote in a market replace despatched to Telegram channel subscribers on Aug. 18.

Bitcoin liquidations composite chart. Supply: QCP Capital

QCP, like others, famous that the market response to the alleged set off — a write-down of SpaceX’s $373 million BTC holdings — appeared exaggerated.

“This introduced again the 2021 and 2022 ghosts of Elon-driven tops and bottoms, and we actually hope the market won’t revert again to these instances once more,” it continued, referring to previous Bitcoin sales and accompanying feedback from Elon Musk, joint CEO of SpaceX and Tesla.

Whole liquidations challenged these seen within the rapid aftermath of the FTX change meltdown — the occasion that resulted in BTC/USD dipping to two-year lows of $15,600 in November 2022.

“This seems like one more signal of the drying liquidity markets have seen over the previous few weeks,” monetary commentary useful resource The Kobeissi Letter added in a part of its personal response.

Analyst: Spot promote quantity nonetheless 50% under 2023 excessive

As BTC’s worth drifted slowly towards $26,000, market individuals diverged over the true nature of the scenario and its future implications.

Associated: How low can the Bitcoin price go?

For widespread dealer and analyst Rekt Capital, the image was bleak — a double-top formation for BTC/USD in 2023, and an entire lack of assist from pattern traces and shifting averages through the breakdown.

“BTC shaped its Larger Excessive at ~$31000 on inclining quantity. However worth shaped the second half of its Double Prime on declining quantity,” he wrote in a part of a number of posts on X (previously referred to as Twitter).

An accompanying chart confirmed buying and selling quantity on each day timeframes, as Rekt Capital warned that capitulation had doubtless not but matched earlier sell-offs.

“Although there was a small breakout in vendor quantity on this crash… It’s nonetheless nowhere close to the Vendor Exhaustion quantity ranges (inexperienced field) of earlier BTC reversals (yellow circles),” he defined.

“Actually, present Vendor Quantity would wish to most likely double to achieve these Vendor Exhaustion quantity ranges that prompted worth reversals in early & late March in addition to mid-June.”

BTC/USD annotated chart. Supply: Rekt Capital/X

Others have been extra optimistic, together with dealer CryptoCon, who recognized key two accomplished duties widespread to profitable BTC worth rebounds throughout bull market retracements.

These concerned relative power index (RSI) values bouncing on the 0.382 Fibonacci retracement stage.

“Each cycle, the Weekly Bitcoin RSI experiences a pretend out of the bull market begin line, some lasting longer than others,” he explained.

“And each one in all them makes a revisit to the .382 Fibonacci retrace of the transfer. With the newest drop, each of these issues at the moment are full.”

BTC/USD annotated chart with weekly RSI. Supply: CryptoCon/X

Rekt Capital famous that each day RSI was now at its most “oversold” since June 2022, with solely two episodes in Bitcoin’s historical past, each in bear markets, beating it.

Wanting forward, QCP in the meantime flagged subsequent week’s commentary from Jerome Powell, chair of the US Federal Reserve, as the following potential supply of volatility.

“We imagine that lots now rests on Powell’s speech at Jackson Hle subsequent week,” it concluded.

Collect this article as an NFT to protect this second in historical past and present your assist for impartial journalism within the crypto house.

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