Key Points:
Retail investors and whale buyers entering the market have slowed the selling pressure on Bitcoin prices, but short sellers still have the opportunity to exploit long liquidations, pushing the price down to 106,000.
The trading volume for spot and perpetual contracts lacks strength, making it difficult to form a trend reversal, with sellers continuously offloading during price rebounds.
Bitcoin bulls are struggling to hold the 112,000 level. Previously, the crypto market had just experienced the largest single-day liquidation of long positions this year. On Monday, 1.62 billion in long positions were liquidated. As the market attempts to recover, Glassnode analysts warn that the Bitcoin bull market may have entered a "post-cycle phase."
Despite Bitcoin briefly stabilizing above 112,000, data from Hyblock's cumulative trading volume difference indicates that sellers continue to dominate price movements, further increasing the likelihood of prices probing deeper towards the lower range.
Further observation shows that according to Binance's real retail long-short account indicator, since Monday, retail investors and whales have been continuously increasing leveraged long positions. As Bitcoin prices decline, the CVD in the 1 million to 10 million range and the 1,000 to 10,000 four-hour anchored CVD highlight the fierce competition between buyers and sellers.
According to the buy-sell price spread ratio of 10% total order book depth, as Bitcoin prices attempt to consolidate in the 113,000 to 111,000 range, selling pressure is gradually weakening.
Although buyers are showing strong interest in the current range, longs have not completely escaped risk. The liquidation heatmap indicates that prices are consuming the liquidity of underlying buy orders, with larger buy order clusters located at 107,000.
From a broader perspective, the current dynamics of the Bitcoin market (excluding macroeconomic factors, spot Bitcoin ETFs, and U.S. stocks) are primarily dominated by the perpetual contract market.
From the end of July 22 to this week, the open interest has fluctuated between 46 billion and 53 billion. Aside from the rebound at the range low of 112,000 on August 3 and 107,000 on September 1, both the spot market buying and the aggressive use of leverage by bulls in the perpetual contract market have been inactive.
Market data shows that the current long trading volume in the spot and contract markets has not seen a significant increase, further enhancing the likelihood of sellers pushing prices down towards the 110,000 to 106,000 range, leading to the liquidation of leveraged longs.
Related: Democratic supporter of Bitcoin (BTC) Ian Calderon runs for California governor.
This article does not contain investment advice or recommendations. Every investment and trading action carries risks, and readers should conduct their own research when making decisions.
Original article: “Bitcoin Dips Entice Buyers as Charts Warn of BTC Drop to $106K”
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