Bitcoin has bounced back from $31,200, which is considered the critical support zone, and is trading at $31,835 at the time of writing. The first cryptocurrency by market cap has experienced selling pressure throughout this week. Experts predict another capitulation event, but have yet to agree on timing and volatility.

 

 

Popular trader and analyst Byzantium General drew attention to the drop in funding rates and the increase in open interest on the BitMex exchange. This is often seen as a bottom mark as liquidity piles up, giving market makers an opportunity to push prices to these levels for more play.

General says:

Cause and effect, gentlemen. Nothing hits rock bottom if most individual traders take long (or short) positions. Now there are some short-term signs of aggression. That’s why shorts put more pressure on them. I’m not sure what’s next. Maybe 30k.

As seen in the chart below, KingFisher states that there are multiple pools of liquidity around $33,000 and $34,000, with indications of increasing volatility. Therefore, it is possible to assume that major players have more incentives for Bitcoin to take liquidity at these levels.

According to additional data provided by CryptoQuant, 14,550 BTC has already entered the exchange platforms. As seen below, this increase in inflows has historically been followed by small upward moves and larger declines. We are likely to see a similar scenario.

Nicknamed trader Daan Crypto believes that Bitcoin remains at the low of the downtrend channel. Daan said that the first cryptocurrency by market cap looks weak and could test new lows at $30,000.

LEAVE A REPLY

Please enter your comment!
Please enter your name here