Bitcoin [BTC] faced challenges surpassing the $100,000 mark despite briefly breaching this significant level multiple times in the past week.
On December 9th, BTC experienced a correction, dropping to $94,200. What lies ahead for Bitcoin traders?
Liquidations Surpass $1.7 Billion
Within a single day, total liquidations soared to a substantial $1.7 billion for Bitcoin pairs alone. This surge can be attributed to intense activity in the futures market, resulting in the elimination of both overleveraged long and short positions around the $100,000 mark.
December 5th also exhibited increased volatility as Bitcoin’s price fluctuated between crucial liquidity areas. Approximately $1.1 billion worth of positions were liquidated in the BTC market on that day.
Based on the 12-hour price chart, the primary cryptocurrency found itself close to the mid-range support level at $95,800. There is a possibility of a further decline towards $94,000 or even $90,000 before the bulls regain dominance.
Bitcoin Liquidation Heatmap Suggests a Higher Probability
An analysis by CryptoCrypto of the 1-month liquidation heatmap indicates the efficient creation and elimination of high liquidity clusters over the past ten days.
In late November and early December, the excitement surrounding the $100,000 threshold triggered a liquidity hunt that extended to $104,000.
Shortly after, a retracement to the $90,500 support on November 26th cleared out another significant liquidity zone.
Looking back over the past month, another retracement towards $90,000 or lower remains a plausible scenario. A closer examination of the 2-week heatmap reveals stronger liquidity formation around $105,000 compared to the $90,000 level.
The presence of liquidity at $102,000 also serves as an appealing target. Therefore, an upward movement towards $102,000 and $105,000 appears slightly more probable. Despite this outlook, traders should brace themselves for a potential decline to $89,000 and manage their risk accordingly.
A breach of the short-term support at $94,000 could signal a deeper descent.
Disclaimer: The views expressed do not constitute financial, investment, trading, or any other form of advice and reflect solely the writer’s opinions.