- The liquidation of long positions on the futures market destabilized the Bitcoin price.
- 7% of the total Bitcoin supply moved as the price settled near $55,000 and was set as a key support.
After several days of bullish news for the crypto market, the Bitcoin price seems to be consolidating again. The market sentiment swung from bullish to greedy after a veritable onslaught of bullish news. A large portion of futures traders acquired long positions in the expectation that the BTC price will remain in “moon mode.”
As a result, the futures market funding rate rose to a new high yesterday, as noted by analyst Lex Moskovski, reflecting the bullish sentiment. However, the bitcoin price failed to meet these expectations and is currently posting a significant loss. Short of the important $60,000 mark, Bitcoin has now been very significantly rejected for the third time in two weeks and fell to $56,850.
At the same time, long positions worth $113 million were liquidated on the futures market in less than 10 minutes, as Moskovski elicited.
— Lex Moskovski (@mskvsk) March 31, 2021
Regarding these liquidations, analyst William Clemente III stated that the market is taking out the “greedy” before continuing the rally. He recommended investors not to be fooled by false “wicks”. Clemente added:
Still expecting more upside in the coming days-week. Saw $100M+ in long liquidations this morning(greedy traders), don’t let scam wicks concern you. We’re going higher.
Analyst “Rekt Capital” stated that BTC is in the process of turning the current price range into a support level, after having a 26% pullback in February when it was rejected near $58,000 and in March when it fell from $61,000. The analyst argues that BTC is entering a rally every time it presents a pullback, followed by a consolidation phase to establish support.
#BTC experienced a -26% retrace after rejecting from ~$57500 in February
Then $BTC experienced a -18% retrace after rejecting from ~$61K in mid-March
• BTC is rallying higher after each retrace
• BTC enjoys shallower retraces upon rejection at higher prices
On the other hand, on-chain analyst Willy Woo was not surprised by the renewed setback, as there were no significant liquidations in recent days.
This is like walking into a forest and noticing the birds just stopped tweeting.
It’s unlike BTC to have a run like this without the sound of liquidations… speculators don’t usually money in longs with smooth sailing without being a little bit rekted.
Fundamentals support the Bitcoin price rally
Woo also established an important support level for BTC by analyzing the movement of Bitcoin supply. According to his analysis, 7% of the BTC supply moved when the price was at $55,000 and 15% when it was at $47,000. Therefore, the cryptocurrency will not return to $46,400 in this bull market, according to Woo’s model.
A time-lapse map of the price when coins last moved. Clusters of strong price discovery:
$55k (7% of supply last moved above this)
$46.4k is the price I’m modelling that we won’t visit again during in this bull market (daily close).
In support of the above, Glassnode showed data from several clusters of Bitcoin volume as the cryptocurrency sat above $54,000. Nearly 1.416 million BTC were moved during and after the crash, as shown by the Unrealized Price Distribution metric. This established Bitcoin’s most resilient level since $11,700, analyst Checkmate said.
The #Bitcoin Unrealised Price Distribution is essentially an on-chain volume profile.
It shows clusters of prices where a large volume of $BTC was transacted.
Over 1.416M $BTC have been moved above $54k.
This forms the strongest on-chain support level since $11.7k! pic.twitter.com/yM3MErSA0X
— _Checkmate 🔑⚡🎟🌱checkonchain.com (@_Checkmatey_) March 31, 2021