Crypto trader CrypNuevo discussed Bitcoin’s BTC/USD journey towards a high-timeframe (HTF) liquidation zone centered around $69,000, pointing out liquidity runs’ potential mechanics and implications.
What Happened: CrypNuevo notes that Bitcoin is gradually approaching the $69,000 liquidation zone, emphasizing the usual pattern of "liquidity runs" that occur before hitting significant liquidation areas. New short positions will likely emerge from traders aiming to catch market tops, contributing to the overall liquidity.
He adds, "Those HTF liquidations at $69,000 are short liquidations from swing traders that took the wrong trade." Essentially, these trades are for targeting maximized liquidity by creating aggressive downside price moves.
The trader notes "timing" as the key indicator of a liquidity run. "False moves tend to happen at the start of the week," suggesting that the current price action might be part of a weekly psychological pattern. He also foresees the possibility of Bitcoin retracing to the 4-hour 50 EMA or testing new support levels.
Also Read: Venture Capital Interest In Crypto Revives: $2.4B Poured Into Bitcoin And Crypto Firms In Q1 2024
Why It Matters: CrypNuevo describes the current market activity as "an aggressive downside price move created to gather more short liquidations in the same area to liquidate more positions in one hit."
This practice can generate a false sense of confidence among traders holding short positions, potentially prompting them to add more margin to avoid liquidation.
The trader also points out the creation of a CME gap that might be filled later, anticipating further liquidations at the $69,000 level. His detailed analysis suggests that the apparent bearish momentum might be a strategic play to trigger a larger liquidation event. This is likely to impact the immediate price movements of Bitcoin.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image created using artificial intelligence with Midjourney.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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