Bitcoin Slips To $51K, Liquidations Peak: This Indicator Signals 10% Correction, Analyst Warns

Bitcoin BTC/USD is down 2% in the past 24 hours, trading around $51,100 and triggering crypto liquidations on the long side.

What Happened: Technical analyst Ali Martinez cited indicators triggering a sell signal for Bitcoin, tweeting:

The TD Sequential indicator shows a sell signal on the #Bitcoin 3-day chart. It's important to note that the last two times this indicator signaled bearish, $BTC experienced a 10% price correction!

If you're planning to join me in this trade, go to @coinexcom, and sign up using… pic.twitter.com/HeHulw5Xni

— Ali (@ali_charts) February 21, 2024

In another post, the analyst highlighted that whales sold around 30,000 Bitcoin, valued $1.56 billion, over the past two days.

Whale selling may be an indicator for profit-taking and prompt prices to drop further.

Furthermore, Wednesday's Federal Open Market Committee (FOMC) meeting minutes will offer insights on Fed officials' reading of the macroeconomic situation and the timing of potential interest rate changes. This may further contribute to price volatility.

Also Read Bitcoin ETFs Lead Top 25 Global ETF Asset Inflows - 'Start Of A Bull Cycle,' Says Analyst

Why It Matters: According to Coinglass data, total liquidations in the past 24 hours amount to $305.9 million, with 105,673 traders being liquidated. 

Bitcoin liquidations account for $77.4 million. Feb. 20 marks the highest amount of liquidations since Jan. 23 ($52.9 million).

The open interest in Bitcoin Futures stands at $23.9 billion, the highest level since November 2021.

While this signals growing interest in the cryptocurrency, it also implies that any unforeseen price movements could lead to further liquidations and create selling pressure in the market.

Additionally, the ratio of long to short positions over the past 24 hours is at 0.99, remaining below 1 since the beginning of February. This suggests prevailing bearish sentiment among Bitcoin traders.

Despite industry veterans like Michael Saylor pledging to hold Bitcoin indefinitely, a short-term correction could be on the horizon.

Read Next: Retail Investors Dip Their Toes Back Into Crypto, But Bull Run Excitement Wanes

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