The Bitcoin Price and Market Analysis
The Bitcoin price has returned to a sideways movement after a strong surge to new yearly highs. The cryptocurrency appears ready for further gains if bulls can maintain a critical level.
Currently, BTC is trading at $36,370, showing a 2% loss over the last 24 hours. In the previous week, it gained 5%, but the sentiment in the sector seems mixed as Ethereum and Solana remained strong while BTC recorded losses.
Potential Bounce for Bitcoin
An analyst suggests that liquidity in the Bitcoin spot market is weighted towards the downside based on a “Liquidity Map.” This metric measures leverage in the BTC/USDT trading pair.
The chart indicates that BTC is close to a large liquidation cluster created by overleveraged positions, which are often targeted by big players. If the $36,300 level is reached, the next area of interest is between $36,961 and $37,700. The analyst stated:
“Big clusters at $36K and ~$37K. Would expect there to be quite some positions build up around that 37K region mainly as we chopped around it all day yesterday. Bears are back in control on the LTF (Low Timeframe) below $36.3K I’d say.”
Possible Local Top for BTC
On the other hand, data from Bitfinex Alpha suggests that historical data may not be favorable for optimistic traders. The firm advises caution as the liquidity gap in the Bitcoin spot market widens. Recent data shows that Short-Term Holders Realized Price (STH RP) bought BTC at an average price of $30,380, which could lead these investors to take profit at current levels.
This presents an opportunity for STH to make significant profits on their BTC holdings. Historically, a monthly change in STH RP exceeding $2,000 often signals local peaks, especially post-recovery in bear markets.
A negative monthly shift in Long-Term Holders Realized Price (LTH RP) usually indicates long-term holders are selling their Bitcoin. The convergence of a $2,000 increase in monthly STH RP and a decline in LTH RP suggests a high likelihood of a local peak in Bitcoin’s price.
Hot Take: Analysis and Implications
The recent sideways movement of Bitcoin following a surge into new yearly highs indicates potential for further gains if key levels can be maintained. However, caution is advised as historical data hints at possible profit-taking by short-term holders at current levels. The convergence of certain metrics suggests a high likelihood of a local peak in Bitcoin’s price. This analysis underscores the need for careful consideration and risk management when trading or investing in cryptocurrencies.
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