BTC price nears $26K amid warning Bitcoin sell pressure can 'double'


Bitcoin (BTC) stayed close to two-month lows on the Aug. 18 Wall Street open as markets got here to phrases with excessive liquidations.

“Drying liquidity” prices BTC price key help

Data from Cointelegraph Markets Pro and TradingView confirmed BTC price motion monitoring sideways after a single each day candle spawned 8% losses.

The largest cryptocurrency noticed a cascade of liquidations throughout derivatives markets, with these accounting for an “outsized” majority amid comparatively slack spot promoting.

“In Deribit it is likely that a large account got wiped, considering the immense short liquidation that occured together,” buying and selling agency QCP Capital wrote in a market replace despatched to Telegram channel subscribers on Aug. 18.

Bitcoin liquidations composite chart. Source: QCP Capital

QCP, like others, famous that the market response to the alleged set off — a write-down of SpaceX’s $373 million BTC holdings — appeared exaggerated.

“This brought back the 2021 and 2022 ghosts of Elon-driven tops and bottoms, and we certainly hope the market will not revert back to those times again,” it continued, referring to previous Bitcoin sales and accompanying feedback from Elon Musk, joint CEO of SpaceX and Tesla.

Total liquidations challenged these seen within the instant aftermath of the FTX change meltdown — the occasion that resulted in BTC/USD dipping to two-year lows of $15,600 in November 2022.

“This feels like yet another sign of the drying liquidity markets have seen over the last few weeks,” monetary commentary useful resource The Kobeissi Letter added in a part of its personal response.

Analyst: Spot sell quantity nonetheless 50% under 2023 excessive

As BTC’s price drifted slowly towards $26,000, market members diverged over the true nature of the scenario and its future implications.

Related: How low can the Bitcoin price go?

For widespread dealer and analyst Rekt Capital, the image was bleak — a double-top formation for BTC/USD in 2023, and an entire lack of help from development traces and shifting averages in the course of the breakdown.

“BTC formed its Higher High at ~$31000 on inclining volume. But price formed the second half of its Double Top on declining volume,” he wrote in a part of a number of posts on X (previously often called Twitter).

An accompanying chart confirmed buying and selling quantity on each day timeframes, as Rekt Capital warned that capitulation had seemingly not but matched earlier sell-offs.

“Though there was a small breakout in seller volume on this crash… It’s still nowhere near the Seller Exhaustion volume levels (green box) of previous BTC reversals (yellow circles),” he defined.

“In fact, current Seller Volume would need to probably double to reach those Seller Exhaustion volume levels that prompted price reversals in early & late March as well as mid-June.”

BTC/USD annotated chart. Source: Rekt Capital/X

Others had been extra optimistic, together with dealer CryptoCon, who recognized key two accomplished duties frequent to profitable BTC price rebounds throughout bull market retracements.

These concerned relative energy index (RSI) values bouncing on the 0.382 Fibonacci retracement stage.

“Every cycle, the Weekly Bitcoin RSI experiences a fake out of the bull market start line, some lasting longer than others,” he explained.

“And every one of them makes a revisit to the .382 Fibonacci retrace of the move. With the latest drop, both of those things are now complete.”

BTC/USD annotated chart with weekly RSI. Source: CryptoCon/X

Rekt Capital famous that each day RSI was now at its most “oversold” since June 2022, with solely two episodes in Bitcoin’s historical past, each in bear markets, beating it.

Looking forward, QCP in the meantime flagged subsequent week’s commentary from Jerome Powell, chair of the United States Federal Reserve, as the following potential supply of volatility.

“We believe that a lot now rests on Powell’s speech at Jackson Hle next week,” it concluded.

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