Key takeaways:
Purchasing activities among both retail and large traders have mitigated the BTC price decline, although bears may still capitalize on long liquidations down to $106,000.
Lackluster spot and perpetual futures volumes hinder a significant trend reversal, as sellers persist in offloading during price recoveries.
Bitcoin (BTC) bulls are striving to maintain the $112,000 threshold, just a day after the crypto market experienced its largest single-day liquidation of long positions for the year. On Monday, $1.62 billion in long positions were liquidated, and as the market attempts to rebound, analysts from Glassnode caution that the Bitcoin bull market might be entering its “late-cycle phase.”
Even though BTC momentarily held above $112,000, aggregate cumulative volume delta data from Hyblock indicates that sellers are still in control of the price action, increasing the possibility of a sharper sell-off approaching the range lows.
An examination of the True Retail Longs and Shorts Account (Binance) metric reveals that retail traders and large investors are ramping up their leveraged long positions since Monday, coinciding with BTC’s decline. The 1 million to 10 million cohort highlights a struggle between buyers and sellers, as seen in the anchored cumulative volume delta (CVD) data for 4 hours.
When compared to the bid-ask ratio set at 10% aggregate orderbook depth, selling pressure appears to be diminishing as BTC attempts to stabilize in the $113,000 to $111,000 range.
Related: Bitcoin struggles at $113K as Fed’s Bowman hints at faster rate cuts
Although buyers are showing interest in BTC’s current price range, bulls are not yet in a secure position, and liquidation heatmaps indicate that the price is eroding underlying bid liquidity, with a major concentration at $107,000.
Taking a broader perspective on the current Bitcoin-specific market dynamics (excluding macro influences, spot BTC ETFs and US equities), daily price movements have largely been driven by the perpetual futures market.
Open interest has varied between $46 billion and $53 billion from late July 22 to this week, and aside from recoveries from range lows at $112,000 (Aug. 3) and $107,000 (Sept. 1), both spot market buy volume and aggressive long leverage in the perps market are considerably lacking.
This scenario, where long positions are reluctant to increase in both spot and futures markets, amplifies the likelihood for sellers to target leveraged longs facing liquidation risks between $110,000 and $106,000.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
