Bitcoin did not have a nice weekend. Low liquidity saw a significant sell-off in the late hours of Sunday/early Monday, and Bitcoin fell 6.16% within six hours as a result.
It also fell below the $90,000 mark after the $92,000 overhead was identified as key near-term resistance.
The bearish net taker volume mirrored conditions on Nov. 21, but was not as extreme, crypto analyst noted Maartun.
Concerns about Tether’s insolvency in the event of a combined decline in gold and Bitcoin added to the anxious sentiment in the market.
The decline also saw $650.67 million worth of positions in the market liquidated, according to the figures CoinGlass data at press time.
Structural Trends: Where Bitcoin Stands
Source: BTC/USDT on TradingView
Analysis showed that the fear surrounding Bitcoin was justified. The drop from $107.5k to $80.6k in November saw little reprieve.
Last week’s upswing was halted even before the 50% retracement level of $94k was tested.
This reflected intense bearish pressure. The next target was the Fibonacci extension level at $74.2k. Incidentally, the area between $74,000 and $76,000 acted as a market bottom in April.
The two-week liquidation chart highlighted two things. The first was the dense collection of liquidation levels in the $83.3k-$85.5k range. Therefore, a further decline in Bitcoin to wipe out this liquidity is likely.
The second was the lack of liquidations between $86,000 and $92,000, a result of the speed of the recent price decline.
Two things could happen: Bitcoin could move higher to $95,000, the overhead magnetic zone, after a sweep of $84,000.
Or Bitcoin could form another range and wander aimlessly. To do so would lead to liquidations at the extremes.
Once this is done, perhaps over a period of a week or two, BTC could look for liquidity at the high end of the range before it drops down just before smart money disappears for the holidays.
Momentum and volume measurements
The OBV on the daily time frame showed steady selling pressure, and the RSI below the neutral 50 reflected bearish sentiment.
There was no evidence of any kind of bullish divergence on the 1-day or 4-hour timeframes.
Mapping the architectural floors and ceilings
The $94k was a technically important resistance level. Liquidation levels around $95k also made it an attractive target for the upside. The immediate objectives were downwards.
A new visit to $80.6kthe low of last Friday is expected in the short term. Along the way $83.3k-$85.5k could cause a price increase after a sweep through this magnetic zone.
Further south, long-term support is running out $74.5k beckoned.
Final thoughts
- Bitcoin’s overarching trend remains firmly bearish, so any price rise is for selling.
- It remains to be seen whether Bitcoin will form a bandwidth and build liquidity on both sides, or race higher to $95,000 before dumping lower again. Traders must be prepared.
Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer