Its been fairly a painful week for Bitcoin [BTC] holders because the markets crashed, undoing its upside because the second half of July. Leveraged positions have notably been within the receiving finish, as fairly a lot of lengthy positions had been liquidated.
Zooming out on Bitcoin’s value chart reveals how Bitcoin’s value motion trapped many merchants into executing lengthy positions. Its retracement on the finish of July was short-lived, creating an phantasm of a stronger value flooring. This may occasionally have inspired leverage merchants to execute lengthy positions within the expectations of extra upside.
The lengthy liquidations metric on CryptoQuant registered a big enhance within the variety of liquidations. The metric peaked at 980 lengthy liquidations as of 19 August. That is the biggest variety of lengthy liquidations within the final 4 weeks.
Supply: CryptoQuant
The excessive variety of liquidations might have contributed further promoting stress as of 18 August, along with regular promote offs. This would possibly clarify why Bitcoin dropped by such an enormous margin. Its value motion dropped by roughly 7.33% between 18 and 19 August. That is the most important single-day value drop since mid-June.
Bitcoin’s promote stress was sturdy sufficient to push it out of its ascending vary. BTC has been buying and selling inside the identical help and resistance-bound vary for the final eight weeks. Regardless of the heavy draw back, Bitcoin shouldn’t be but in oversold territory. Nonetheless, its On-balance Quantity (OBV) indicator dropped to its lowest degree since March 2019. It’s anticipated to pivot quickly.
Supply: TradingView
Why Bitcoin’s present draw back could be short-lived
The OBV shouldn’t be the one purpose why BTC’s outlook at the moment favors a bullish pivot. The Function Bitcoin ETF Holdings made a notable contribution to BTC’s newest draw back. It shaved off 3,609 BTC between 11 and 19 August which is price greater than $77 million at present market value. Nonetheless, its outflows notably tapered out since 15 August.
Supply: Glassnode
Lowered outflows from institutional traders such because the Function Bitcoin ETF Holdings are affirmation that promote stress is slowing down. This final result is additional collaborated by the truth that whales are additionally shopping for the dip. The variety of Bitcoin addresses holding greater than 1,000 BTC elevated considerably since 17 August.