Introduction
With this post I want to provide you with some interesting trading Data and an unbiased potentially outlook where this could lead to in the next days / weeks.
As many of you know Bitcoin has been very slow recently barely moving up nor down in a smaller range. In the last almost 5 days BTC moved entirely in a ~2% range with a little sell off before a short squeeze towards 30k ahead of it.
This sideway movement and lack of volatility leads to a lot of positions being added overtime all with the same liquidation & stop loss levels. Especially high leveraged positions aren't getting wiped out but instead, more and more being added.
Trading Data
Taking a look at the chart above we can see a heavy decline in the SPOT CVD with a fading open interest the last days and incredible low volume. This suggest a low interest to trade due the lack of volatility. This has been going on for weeks now except the few spikes & plunges we had in between.
Liquidation Data - 11 Billion stacked in a close range
This is what I've meant. Look at the huge amount of liquidation levels stacked around the current price. There is ~$3.2bn worth of Liquidations sitting at $28,800. That's in less than a 1% range from current prices. Because of the lack of volatility it all stacked up right there over the last days.
Overall there's currently almost $8Bn worth of Liquidations just between $28,000 & $29,000. That still only takes a ~3.5% plunge from current price to get triggered.
Additionally, there's also a outstanding high amount of shorts liquidations sitting ~$30,100 currenlty worth over $4Bn!
This is exactly why you sometimes see quick rallies but also larger red selling cascades on no news. The amount of liquidations can move the price brutally up or down.
What this means
derivative liquidations are usually fueling price action short term. As you can see during the short squeeze ripping through the levels in the chart below :
it fueled the climb from $28,700 -> $30,000 within a couple hours. ( yellow circle = shorts liquidations )
Conclusion:
You can expect high volatility coming soon with chances for liquidation plunges but potentially also spikes. The longer we crab and stay around 29,000, the more positions are added that will eventually fuel high volatility. Any news will most likely trigger such an event.
For the long term accumulators this could mean there might be a nice chance to grab some cheap BTC in a heavy sell off cascade but also for traders it could mean we'll see a short squeeze rally ripping through $30,100 towards $30,500
No comments:
Post a Comment