A popular crypto trader has taken to social media platform This forecast is based on the liquidity dynamics that have determined the price of the flagship in recent weeks.
The Bitcoin market structure suggests more volatility is ahead
In an April 4 post on the X platform, KillaXBT revealed the possible trajectories that the Bitcoin price could follow in the coming weeks. The crypto trader’s analysis is based on BTC’s current technical structure, citing multiple support and resistance levels visible in the weekly time frame.
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The analyst explained that investors have seen multiple swings across external highs and internal lows in recent weeks. To be precise, the streak appears to have started about four weeks ago with a series of external highs, which in turn caused a rapid reversal in the Bitcoin price – ultimately leading to a bearish weekly close.
KillaXBT explained that as a result of this move, Bitcoin had to rebalance; this led the flagship cryptocurrency’s weekly candle back towards $71,500. Interestingly, this move was apparently with the intention of breaking out late short positions before prices turned bearish again – a move that KillaXBT believes was the classic liquidity hunt we saw before the reversals.
As last week’s candle closed bearish, the crypto expert highlighted another notable event; the current week also provided some liquidity (another rebalancing event). What followed this sweep is clearly another downward rejection of the BTC price.
However, because Bitcoin’s recovery is largely driven by leveraged positions, and because the market structure is already bearish, KillaXBT implies that available buying pressure could soon be exhausted. As such, the lows of $64,900 appear to be exposed for another liquidity analysis.
In the medium term, the technical analyst also sees Bitcoin breaching the external low of $63,000. On the other hand, the market quant highlighted that this downward move is in line with expectations of an immediate reversal towards $72,800, where yet another selling move is looming.
Short-term holding activity supports short-term bearish sentiment
In another post on X, on-chain analyst Joao Wedson says shared that there has been a notable change in behavior among short-term participants in the Bitcoin market, with the data suggesting that this cohort is increasingly losing their holdings. The relevant indicator here is the Short-term Holder Net Position Change metric.
This investor cohort typically includes investors who have held Bitcoin for less than 155 days. As such, they are often more reactive to sudden changes in price action, unlike more seasoned market participants.
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By extension, the activity of these new holders can actually reveal the change in sentiment (in this case, bearish sentiment). When this happens (impulsive selling activity), the Bitcoin price often heads south as these selling contribute to bearish pressure.
So the world’s most important cryptocurrency could indeed head towards $63,000 in the short term, at least before any real recovery attempts are made. At the time of writing, Bitcoin is trading at around $67,256, reflecting a growth of 0.5% in the past day.
Featured image from iStock, chart from TradingView