Bitcoin Crashes To $19,600 And Takes Long Liquidity, BTC Ready For A Bounce?
October 07 2022 - 10:05AM
NEWSBTC
Bitcoin is retracing after a rejection north of critical resistance
at around $20,000 and might be gearing up for a fresh leg down into
its final support level. The crypto was seeing some profits earlier
this week, but any bullish momentum has been wiped out by
macroeconomic forces. Related Reading: Shiba Predator Cracks
Double-digit Gains, How Far Can Price Go? At the time of writing,
Bitcoin (BTC) trades at $19,600 with a 2% loss in the last 24 hours
and sideways movement across the week. The rest of the crypto
market is following the sentiment in the crypto market proving
that, once again, any potential rally is capped by the bigger
picture. Bitcoin Takes Out Leverage Longs, Time For A Squeeze?
According to analyst Justin Bennett, Bitcoin made a downside run
towards $19,600 and a bit lower to remove leverage players from
their positions. The cryptocurrency often moves in the opposite
direction of the majority of traders and makes a run for the
liquidity pools created by over-leverage positions. In this case,
retail traders might have jumped into the bullish price action
experienced this week by taking longs in hopes of further
appreciation. Bennett believes that with these players out of the
way, the market might be readying for a bounce: BTC long
liquidations run at $19,600, as mentioned yesterday in Discord. Now
probably time for a bounce back to $20,500. Just trading both sides
of the range for now. In general, Bennett has been bullish on
Bitcoin and will maintain this biased as long as BTC’s price stays
above $18,700. This price is the bottom of a potential channel
created by the cryptocurrency over the past months. The recent
price action has been hinting at a longer relief rally into the
$26,000 area. In the short term, with leverage longs out of the
game, it might be time to squeeze out the shorts. The analyst
added: I still think it’s only a matter of time before we see short
liquidations run between $20,450 and $20,800. Just playing the
range for now. Macro Forces Push Down Crypto Market What prompted
Bitcoin to crash from its weekly high? A pseudonym trader believes
it was the recent data on Job numbers in the U.S. economy. This
report might provide the U.S. Federal Reserve with support to
continue hiking interest rates to take down inflation, and risk-on
assets with it as a consequence. As reported by NewsBTC, the Fed’s
monetary policy has been costly for equities and the crypto market
moving in tandem with these assets Now, the Job numbers are telling
the financial institution that it can keep on applying pressure to
the markets. Related Reading: This Little-Known DeFi Token Is
Attracting Investors – Find Out Here However, this trader believes
the recent price action has switched back to sideways mode, and
that Bitcoin might avoid any catastrophic downside price action,
for the time being. Via Twitter, this trader said: This puts us
back in the middle of the eternal 18.5-20.5K area and because of
this we’re quite a way out from any break out, be it up or down.
Unless something special happens I’d say it’s likely we stay within
this area roughly until at least the CPI number next Wednesday.
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