- Bitcoin has a key level of $59.4k from both a technical and liquidity perspective
- The one-sided sentiment in the futures market could soon trap late bears
Bitcoin [BTC] saw a decline in demand and outflows from ETFs, strongly suggesting the need for a larger price correction in the crypto market.
Some ETF platforms had zero flow days, but this was normal for stock market trading in any sector.
For the fourth time since late February, Bitcoin prices approached the support zone at $60,000. The technical indicators suggested that the bulls might fail to hold ground this time.
The demand zone and liquidity at $60k
Source: BTC/USDT on TradingView
Buyers have been stubbornly holding on to the $59.2k-$61k zone for the past seven weeks. During this time the OBV had formed a support, highlighted in orange.
However, recent sales volume pushed OBV below this key level.
This was an early signal that prices were likely to fall further and that the $60,000 support zone might not be defendable this time. The RSI underlined solid bearish momentum.
Below the $59.4k Fibonacci support level, $55.5k and $50.5k are the next more interesting time ranges.
Therefore, investors and traders should be prepared for further losses if we see a drop below $60,000 this week.
Short-term liquidation levels favor a rebound from this level before a bullish reversal occurs
The cumulative delta of the liquidation levels was negative, highlighting that the short liquidation levels exceeded the long liquidation levels by a wide margin.
As prices are attracted to liquidity pockets, a move to the upside was promoted.
That said, there was a $342m liquidation cluster for $59.4k. The confluence with the Fib level meant that a move towards the $59k level to break these long liquidation levels was likely.
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After that, Bitcoin prices could rise to gather liquidity in the north. However, we have seen that the selling pressure has been intense.
A recovery of $59.4k was not guaranteed under these circumstances, despite the skewed cumulative delta of the liq levels.
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.