- Traders are over-indebted: $96,957 at the low end and $99,813 at the high end.
- Bitcoin will cross the $100,000 mark again if it closes a daily candle above the $99,700 level.
The cryptocurrency market suffered a setback after Bitcoin [BTC]The world’s largest digital asset saw a significant price drop of 5.47% in just one minute after crossing the historic $100,000 mark for the first time.
This remarkable price drop has changed the overall market sentiment as traders have liquidated nearly a billion worth of long and short positions.
Why is BTC falling?
The potential for this significant price drop is not yet known. However, data from on-chain analytics firm Coinglass reported that significant inflows onto the exchanges could be responsible for this price drop.
Source: Coinglass
BTC spot inflow/outflow statistics reported that exchanges witnessed a significant $732.5 million in BTC outflows. In the cryptocurrency context, “outflows” refer to the movement of assets from wallets to exchanges, which is often seen as a sign of selling pressure and a potential price decline.
However, the recent price drop has sparked fear among traders and investors and further increased concerns about whether the price will fall further or whether the market will recover.
Bitcoin technical analysis and key levels
According to AMBCrypto’s technical analysis, BTC is consolidating within a narrow range between $92,000 and $99,100. However, a recent breakout from this zone appears to have been a bull trap as BTC has failed to maintain its position above the range and has fallen back within it.
Source: TradingView
Based on recent price action, if BTC breaks above the upper limit of the range and closes a daily candle above the $99,700 level, there is a high possibility that it will cross the $100,000 mark again and maintain its position.
Conversely, if BTC breaks below the range and closes a daily candle below the $91,500 level, there is a good chance that it could fall towards the $86,000 level.
Meanwhile, BTC’s Relative Strength Index (RSI) currently stands at 62, just below overbought territory, indicating that the value still has room to rise in the coming days.
High liquidation levels
Beyond the technical analysis, key liquidation levels are currently at $96,957 on the downside and $99,813 on the upside, with traders being over-leveraged at these points according to Coinglass.
Source: Coinglass
If sentiment shifts to bullish momentum and the price rises to the $99,813 level, short positions worth nearly $938 million could be liquidated.
Conversely, if sentiment turns bearish and the price falls to $96,957, long positions worth approximately $364 million could be liquidated.
Read Bitcoin’s [BTC] Price forecast 2024-25
This liquidation data indicates that bearish sentiment is strongly dominating the asset as many believe that the BTC price will not cross the $99,813 level.
At the time of writing, BTC was trading around $97,970 and has registered a price drop of 4.10% over the past 24 hours. During the same period, trading volume rose 4%, indicating a modest increase in investor and trader participation compared to the day before.