Bitcoin continued to struggle, with assets recently falling below the $80,000 support level it had consolidated around for at least twelve days.
Structural signals are piling up to support the bullish outlook on the chart, but liquidation risk in the perpetual market creates significant short-term headwinds that traders cannot ignore.
HODLers hit a 14-month high
Long-term holders, the group of investors known to own Bitcoin [BTC] for at least 155 days without selling could be critical to Bitcoin’s performance from this point on.
The Bitcoin HODL Bank, which measures the level of unrealized profit among Bitcoin holders, has hit a 14-month high at the time of writing. This means that holders are increasingly locked into their positions and selling at a minimum.
That’s not all. Historically, increases to this level have reflected strong bullish conviction among investors, and the indicator formed at similar values before both the mid-2020 and mid-2023 rallies that preceded significant price highs.
Confirmation for Bitcoin would come from the fact that the asset has reached the $82,500 resistance level that it has been struggling to break through for weeks. Nevertheless, Bitcoin seems structurally ready for a rally.
Long traders absorb $185 million in liquidation losses
Despite the positive structural conditions of long-term holders, liquidation data shows that taking a long position in Bitcoin in the perpetual market currently carries significant risks.
Traders who went long Bitcoin in the past 24 hours recorded $184 million in forced closed positions, compared to just $4.17 million on the short side.
What this implies is that there are currently more incentives for traders to open short positions on Bitcoin, which could impact the asset and push it even further down from current levels.
That’s not all. Data shows there is an ongoing sell-off across the top five cryptocurrency exchanges by volume, including Binance, Bybit, OKX and KuCoin.
At the time of writing, the long-to-short ratio on all four exchanges shows that selling volume exceeds buying volume on the perpetual Bitcoin market. A continuation of this trend would weigh significantly on assets in the future.
Limited downward liquidity
The liquidation heatmap shows that Bitcoin is currently caught between two key levels on the chart, with the balance of the cluster positioning suggesting that the market has a greater tendency to swing upwards than to maintain its downward momentum.
This value is based on the cluster levels visible in the chart, which show limited liquidity below the price. These clusters act like magnets and attract the price over time.
A price drop to the lower cluster level would absorb buying orders in that zone before the resulting demand would be used to push Bitcoin back to a higher level. For now, however, liquidity clusters reflect a tight range, and the next meaningful change in direction remains to be confirmed.
Final summary
- Bitcoin HODLers have hit a 14-month high in unrealized gains, a level that preceded major rallies in mid-2020 and mid-2023.
- Long traders absorbed $185 million in liquidations over the past 24 hours, compared to just $4.15 million on the short side, with selling volume dominating at Binance, Bybit, OKX and KuCoin.