Bitcoin long traders are started to get in line following the breakdown from the recent high at $8,464. The data provided by Datamish, a platform that tracks BitMEX Bitcoin contract trading shows a maximum of 3.326 million long positions liquidated. On the other hand, only 81k shorts have been liquidated in the same six-hour period.
The surge to levels close to $8,500 came as a surprise to many analysts. Bitcoin had been building a gradual uptrend from the lows posted in December around $6,500. However, it is clear that the surge was not fundamentally supported.
Meanwhile, the price is teetering at $7,796 while battling the resistance at the 61.8% Fibonacci level taken between the last swing high of $8,462.50 to a swing low of $6,849. The 50 Moving Average on the 1-hour chart and the 100 SMA are towering above the price; suggesting that the bears are in control. Moreover, the trendline support broken at $7,898 is contributing to the ongoing reversal.
On the other hand, the formation of a short-term falling wedge pattern suggests that Bitcoin could soon embark on another assault mission on $8,000. Besides, the bulls still have their eyes transfixed on $8,400.
From a technical observation, Bitcoin price will likely consolidate between the 50% Fibonacci level and the 61.8% Fibonacci. The Relative Strength Index leveling movement at 40 confirms the possible sideways trading.
Bitcoin Key Technical Levels
BitMEX index price: $7,795
24-hour volume: $2.4 billion
Open Interest: $722 million
Spot rate: $7,797.5
Relative change: -13.5
Percentage change: -0.17%
Image from TradingView
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