Increase Your Trading Profits by Identifying Long Squeeze Opportunities in Bitcoin and Ethereum
In the current bullish cryptocurrency market, itโs important for traders to be aware of the potential for long squeezes. As prices rise and traders open long positions, liquidity pools are left behind. This can lead to a cascade effect where liquidation of these positions drives prices further down. By identifying cryptocurrencies with high volumes of longs, traders can prepare for potential retracements and capitalize on increased volatility.
Bitcoin (BTC) at $50,000: A Long Squeeze Alert
Bitcoin has accumulated significant long liquidations around the $50,000 mark, which is an important psychological support and resistance level. Looking at the monthly chart, there are eight liquidity pools ranging from $50,700 to $49,700, each with over $1 billion. Half of these pools have over $2 billion worth of long liquidations, totaling over $12 billion.
However, there are also smaller liquidity pools to the upside, indicated by a candle wick at $64,300. Professional traders may exploit this wick to attract more liquidity to the $50,000 zone before initiating a long squeeze.
Ethereum (ETH) Could Retrace to $2,400
Ethereum also has significant liquidity pools indicating a potential long squeeze. These pools suggest a retracement down to $2,400 and could result in liquidation of many traders who entered positions at previous levels.
Similar to Bitcoin, Ethereum may first visit its local top around $3,500 in order to accumulate more long liquidations before experiencing a larger downward move.
Prepare for Potential Retracements and Increased Volatility
Based on the analysis of Bitcoin and Ethereum, it is likely that these cryptocurrencies will retrace to lower levels in a correction following the recent rally. This could result in losses of 18% and 29% from their current prices of $61,000 and $3,400, respectively.
Itโs important to note that these retracements are historically common in the highly volatile cryptocurrency market during bull runs. However, there is also the possibility that Bitcoin and Ethereum may experience a brief pump to their local tops before moving downward. Additionally, the derivatives market could shift in the coming weeks, potentially eliminating the threat of a long squeeze.
Hot Take: Be Prepared for Potential Retracements and Increased Volatility ๐
In conclusion, as a crypto trader, itโs crucial to stay informed about potential long squeezes and the resulting retracements in Bitcoin and Ethereum. By identifying high volumes of long positions and monitoring liquidity pools, you can prepare for increased volatility and potentially capitalize on profitable trading opportunities.
Remember to always conduct thorough research and analysis before making any trading decisions. Keep an eye on market trends and indicators, as they can provide valuable insights into the direction of prices. Stay vigilant and adapt your trading strategy accordingly to maximize your profits while minimizing risks.
Fin Boldom has emerged as a notable crypto analyst, accomplished researcher, and adept editor, leaving a distinct mark in the field of cryptocurrency. As a skilled crypto analyst and researcher, Fin’s insights delve deep into the complexities of digital assets, resonating with a diverse audience. His analytical acumen is seamlessly complemented by his editorial finesse, enabling him to distill intricate crypto information into easily comprehensible content