- Advertisement -
Bitcoin is trending sideways over the US long weekend, with the price of BTC compressing around $19,500 and $20,500. Support around the lower zone of this range could be tested as the number one cryptocurrency struggles to maintain its current levels.
At the time of writing, Bitcoin (BTC) is trading at $19,900 with gains of 1.4% over the past 7 days and sideways price action over the past 24 hours. The price of BTC is severely underperforming other cryptocurrencies as Ethereum (11%), Cardano (14%) and Polkadot (10%), posted significant gains over the same period.
Data from material indicators points to a potential local top for Bitcoin on low timeframes as demand (sell) liquidity thickens around immediate levels. Sell orders have increased over the past week as Bitcoin trades sideways and could act as resistance preventing BTC from regaining territory north of $20,000.
As can be seen in the chart below, bid (buy) orders disappear as demand liquidity increases around $19,500, contributing to the weakening of this key level, in the short term. The next immediate support is $19,000, which currently holds about $15 million in buy orders.
The spike in demand liquidity correlates with an increase in selling pressure from small investors to Bitcoin whales. When Bitcoin’s price rose in August, bigger players took advantage of the relief and “dumped” into the market.
Smaller investors followed, but with a slower response. Bitcoin whales have held steady with bid orders around $100,000 showing a small increase.
Additional data from a recent Glassnode report coincides with Material Indicators, Bitcoin whales have sold their coins as the price of Bitcoin trends upward. This is part of a second phase of distribution experience by the crypto market after a capitulation event. glass node noted:
After months of accumulation, the market managed to rise above $24k, but as described in WoC 34 and WoC 35, this opportunity for exit liquidity was seized through distribution and profit taking.
Can Bitcoin recover $20,000 in the short term?
The main resistance area is $24,000, as noted above, and $24,500, as whales with more than 10,000 BTC use this zone to “aggressively distribute coins in the range,” the report said. Bulls need to rise above these levels to avoid further downward pressure and potentially regain some of the bullish momentum.
As pseudonymous users have noted, short positions pile up as Bitcoin moves between $19,500. Over the past week, the market has liquidated millions from wiped out shorts as BTC’s price trends moved closer to $20,000.
This could provide the market with enough ammunition for a short squeeze over $20,000 and in the critical resistance areas.
It only took a 2% pump for $200 million worth of shorts on Binance to fold.
What the hell are these guys doing. pic.twitter.com/Zn4g6qvBpm
— Byzantine General (@ByzGeneral) September 5, 2022