Though Bitcoin caused many long liquidations, respite may be coming.
- Bitcoin’s market structure revealed it was close to a re-accumulation zone. A bounce to $65,065 could be BTC’s target once the coin recovers.
According to crypto trader Rekt Capital, Bitcoin [BTC] has left the danger zone and has reached the re-accumulation area. The analyst mentioned this in a post on X (formerly Twitter) on the 11th of May.
From the chart Rekt Capital shared, he explained how the coin has satisfied the post-halving correction, and in two days, Bitcoin might have left the danger area entirely.
The red days are almost over
To back up his rationale, he referred to the 2016 post-having cycle. At that time, three bearish engulfing candlesticks appeared within 21 days. Later on, BTC surged past $4,250 within some months.
On the 2024 chart, another set of red candlesticks appeared, suggesting that Bitcoin’s correction could be close to its end. At press time, Bitcoin’s price was $60,509.
Source: Rekt Capital/X
This was a 5.61% decrease in the last seven days. As a result of this plunge, many BTC contracts in the market were liquidated.
Using data from Hyblock, AMBCrypto noticed that there was a magnetic zone around liquidation levels. This indicator shows price levels where traders risk being liquidated.
The magnetic zone (blue) indicates a high level of liquidity and implies that the price might move in that direction. For Bitcoin, the price could move toward $65,065 in the short term.
This might happen only if BTC bounces. Failure to reverse upwards might cause a further price decrease. Also, the CLLD, which is the Cumulative Liquidation Level Delta (CLLD) was negative.
Negative values of the CLLD indicate that short are starting to feel more of the liquidations. If sustained, this could be bullish for Bitcoin’s price.
Source: Hyblock
HODLers are in on the exit
We also found evidence of the potential price increase from another metric on Glassnode. The metric in question was the Hodler Net Position Change.
Hodler Net Position Change tracks the monthly net position of long-term investors. If the value is negative, it means that Bitcoin holders are realizing gains, or cashing out on their assets.
However, a positive reading of the Hodler Net Position Change implies accumulation. Up until the last week of April, the metric was negative, indicating that investors were booking profits.
But since the first week in May, that has changed. Specifically, long-term holders bought 26,990 BTC on the 10th of May. As it stands, this accumulation might continue.
Sustaining this momentum might ensure that Bitcoin trades above $60,000 in the coming days. For the long term, this could be instrumental for the parabolic upside.
Source: Hyblock
However, traders might need to be wary as BTC might drop further. As Rekt Capital opined, Bitcoin might still have two more days of downside before the price might begin to rise slowly.
Follow AMBCrypto on Google News
Next: XRP: Decoding what’s next – Do bulls still stand a chance?
Source