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Understanding Today’s Bitcoin Dip: Critical Levels to Guide Your Next Action
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Market Musing-g

Understanding Today’s Bitcoin Dip: Critical Levels to Guide Your Next Action

CoinEagle.com
By CoinEagle.com
Created 1 month ago, last updated 1 month ago
3 mins read
Understanding Today’s Bitcoin Dip: Critical Levels to Guide Your Next Action

Key Points

  • Bitcoin’s price dropped significantly after crossing the $100,000 mark, causing a shift in market sentiment.
  • Traders are overleveraged at $96,957 and $99,813, which could lead to major liquidations if the price shifts.

Bitcoin recently experienced a significant 5.47% price decline in a minute, shortly after crossing the $100,000 mark for the first time. This abrupt price decline has led to a change in the overall market sentiment, as traders have liquidated nearly a billion worth of long and short positions.

Reason for BTC’s Decline

The cause of this significant price drop is yet to be determined. However, data from the on-chain analytics firm Coinglass suggests that a substantial inflow into the exchanges might have contributed to this price decline. It was reported that exchanges have seen a significant $732.5 million of Bitcoin (BTC) outflow. In the cryptocurrency context, “outflow” indicates the movement of assets from wallets to exchanges, often seen as a sign of selling pressure and a potential price decline.

The recent price drop has created fear among traders and investors, raising concerns about whether the price will drop further or if the market will rebound.

Bitcoin Technical Analysis

According to technical analysis, BTC is consolidating in a tight range between $92,000 and $99,100. However, a recent breakout from this zone seems to have been a bull trap, as BTC failed to sustain its position above the range and has fallen back within it.

If BTC breaks out above the upper boundary of the range and closes a daily candle above the $99,700 level, it is likely to cross the $100,000 mark again. On the other hand, if BTC breaks below the range and closes a daily candle under the $91,500 level, it could drop to the $86,000 level.

BTC’s Relative Strength Index (RSI) currently stands at 62, just below the overbought territory, indicating that the asset still has room to rise in the coming days.

Major Liquidation Levels

The major liquidation levels currently stand at $96,957 on the lower side and $99,813 on the upper side, with traders overleveraged at these points. If sentiment shifts towards bullish momentum and the price rises to the $99,813 level, nearly $938 million worth of short positions could be liquidated. Conversely, if sentiment turns bearish and the price drops to $96,957, approximately $364 million worth of long positions could be liquidated.

The liquidation data suggests that bearish sentiment is strongly dominating the asset, as many believe the BTC price will not surpass the $99,813 level.

At press time, BTC was trading near $97,970 and has registered a price decline of 4.10% in the past 24 hours. During the same period, its trading volume increased by 4%, indicating a modest rise in investor and trader participation compared to the previous day.

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