- Bitcoin saw a high trade volume on the derivatives markets, but not at the spot markets.
- The construction of liquidation levels at $ 100k and lower the prices could lower.
Bitcoin [BTC] reached a record high of $ 111,980 on Binance on Thursday on 22 May. It was reported that the open interest (OI) reached a record high of $ 74 billion. The influx of capital into the derivatives market in recent days meant Bullish conviction.
At the same time, countless liquidations have been built up under the level of $ 100k. This can attract the price to the south, because the price is attracted by liquidity. Should traders expect a withdrawal in the short term?
Data of Coinyze showed that the OI trend was flattened after BTC has reached a new all time. The financing speed had been highly positive, but in the last 24 hours it has fallen to neutral levels.
Traders must prepare for a withdrawal in the short term
In a message about cryptoquant insights, user Darkfost Be it that the spot demand decreased. The futures trading volume went strong and emphasized a high speculative importance. Yet the decrease in the spot volume was when Bitcoin entered his price discovery phase a disappointment.
The lack of spot demand suggested that investors were careful with buying BTC above the $ 94k $ 96k area. This region had earlier in May as a resistance before the price broke out to almost touch the $ 112k marking.
A rally led by the derivatives market can run the risk of increased volatility and deeper withdrawal.
Source: BTC/USDT on TradingView
The 1-day graph of Bitcoin zooms out to cover the price action of the past six months, emphasized a possible range (white). Two routes were possible in the coming weeks- a persistent uptrend, or a reset to $ 100k or even $ 93k.
When shapes reach, price action within reach causes the liquidation levels to build around the extremes of the range. The retracement up to $ 77.5K in March and the subsequent recovery saw short liquidations built up at $ 99.6k, $ 108k and $ 113k.
The first two levels have been swept. The decreasing spot demand suggested that a market set was possible and that $ 113k is out of reach for the time being.
The 3 -month graph underlined the construction of liquidation levels at $ 100k and $ 92k as the next potential goals.
Depending on the profitable activity and whether the bulls can find their feet again, Bitcoin can again give $ 106k to the bears.