Bitcoin (BTC) Futures Wiped Out $44 Million Amid Volatile Trade
In a volatile trading session on Monday, Bitcoin (BTC) futures positions worth over $44 Million were liquidated. The spot price of the largest digital currency by market capitalization swung more than $1000, fluctuating between session lows around $26,400 and new highs for the 30 days around $27,400. As of now, Bitcoin is trading in the $26,700s, up next to 1% for the day. The price action does not have any specific news stories or fundamental catalysts behind it.
One possible factor contributing to the pullback in Bitcoin price may be a filing from an auditor of Binance. United States. The auditor expressed difficulty in verifying Binance’s collateralization of assets at times, which may have caused some jitters and weighed on sentiment. Nonetheless, two factors underpinning the price action are expectations for an interest rate hold from the United States Federal Reserve later this coming week and technical buying.
According to coinglass.com, out of the $44 Million in futures position liquidations on Monday, approximately $32 Million were short positions. This marked the largest wipeout of Bitcoin (BTC) bears since last Monday when the Bitcoin price briefly dropped below $25,000. Although while Bitcoin’s price outlook worsened in August after sliding below its uptrend and 200DMA, it has recently found support at its 21DMA and a downtrend that has been in play since early August.
Bitcoin’s Price Outlook and Key Resistance Levels
Since breaking over its recent downtrend and 21DMA, Bitcoin’s outlook has improved. It appears to have established a new range between $25,000 and $28,000ish. Nonetheless, to retest yearly highs, Bitcoin (BTC) needs to break over key resistance in the $27,700-$28,500 area.
Where Next for the Bitcoin (BTC) Price?
The macroeconomic factors are likely to play a whole lot of role in determining Bitcoin’s price this coming week. The United States Federal Reserve is expected to hold interest rates on Wednesday but may leave room for another rate hike later in the year. Traders will closely examine the central bank’s new economic forecasts and dot plot summary of interest rate projections to assess the probability of future rate hikes in 2023 and probable rate cuts in 2024.
Although while most investors do not anticipate another rate hike in the year, the possibility mentioned by the Fed is preventing markets from getting too excited about pricing rate cuts in 2024 and beyond. This helps keep United States yields and the United States dollar supported. Given Bitcoin’s historically negative correlation with the United States dollar and yields, it is very likely remain within its recent multi- 30 days range of $25,000-$28,000 unless there is a whole lot of reversal in the United States dollar and yields.
Hot Take: Bitcoin (BTC) Faces Consolidation Amidst Uncertain Macro Environment
In a volatile trading session, Bitcoin (BTC) futures worth over $44 Million were liquidated. The digital currency swung more than $1000 between session lows and new monthly highs. Although while no specific news or catalysts drove the price action, expectations for a United States Federal Reserve interest rate hold and technical buying contributed to the market sentiment. Regardless of the recent wipeout of short positions, Bitcoin’s price outlook has improved after finding support at key levels. Nonetheless, breaking over resistance at $27,700-$28,500 is critical for a retest of yearly highs. Looking ahead, macroeconomic factors will play a vital role as the Federal Reserve releases economic forecasts and interest rate projections. Bitcoin’s price may remain within its recent range unless there is a whole lot of change in the United States dollar and yields.
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