Bitcoin’s price, currently hovering above $60,000, has drawn keen attention from market observers amid signals of a potential rebound.
Despite recent liquidations of long positions, traders are cautiously optimistic about a price upturn, noting high bid liquidity near crucial support levels, which suggests a market ripe for a bullish reversal.
According to Keith Alan from Material Indicators, heightened buyer interest before encountering significant selling pressure historically points to a specific pattern unfolding in the market.
“Bitcoin has witnessed a notable liquidation of long positions this week, with a sudden retracement wiping out hundreds of millions in positions,” Alan remarked, highlighting the importance of increased bid liquidity in facilitating any breakthrough amidst this market turbulence.
DecenTrader suggested that negative funding rates, which were observed for the first time since October 2023, reflect a calmer derivatives trading environment. These periods of negative funding typically prove short-lived, and often taken to indicate an abrupt shift towards bearish sentiment, with shorts now paying longs.
Despite this, Bitcoin faces downward pressure after a 15% weekend dip. Based on Elliott Wave Theory, analysts eye a potential bottom around $59,000, as outlined by Mark Cullen, who anticipates a final downtrend to reach this level.
“Bitcoin could still experience one last dip to complete Wave C of its larger corrective formation,” noted Cullen, speculating that such a move could occur soon.
Analysts such as Matthew Hyland are closely monitoring the weekly close for insights into the duration of the current pullback before a potential return to previous highs. Hyland’s adjusted cumulative value days destroyed (CVDD) metric suggests that BTC/USD may linger below previous peaks before attempting to challenge them once more.
While deeper corrections remain possible, analysts do not anticipate the current downward momentum to escalate to the panic levels witnessed during the cross-market crash of March 2020. Instead, traders are vigilant, analyzing price movements and liquidity levels for indications of Bitcoin’s next trajectory.
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Disclaimer: This piece is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
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