Over the past two hours, Bitcoin has rapidly reversed after it passed $7,000 on Sunday. As of the time of this article’s writing, the cryptocurrency trades at $6,675, some 8% below the daily high around $7,200. BTC wicked as low as $6,580 just minutes ago.
According to data from Skew.com, this strong move lower resulted in $30 million worth of long-side liquidations on BitMEX while other platforms probably saw a similar move. Sellers seem to be accumulating shorts into the crash, with BitMEX open interest denominated in BTC actually rising from around 71,000 BTC to 73,000 BTC amid the drop.
It isn’t clear what caused this move, but gold has begun to rally while the futures for the American stock market (S&P 500 futures and Dow Jones futures) have seen a tepid open after a record rally last week.
Many Remain Bullish On Bitcoin
According to prominent crypto trader Mac, the recent price action is likely going to be a precursor to a rally to fresh multi-week highs. His chart, published when BTC was surging past $7,000 just hours ago, predicted a return to $6,600, which just took place, and then a subsequent 15% rally to $7,600, which has yet to take place.
$BTC looking at something aka this, will re-evaluate on weekly close pic.twitter.com/hQfK2KoKJ8
— Mac ❄️🐺 (@MacnBTC) April 12, 2020
To add to this, per previous reports from NewsBTC, Su Zhu of crypto and forex fund Three Arrows Capital observed that on April 10th, there was a massive Ethereum buy wall on Bitfinex. Buyers, in fact, put up a jaw-dropping 250,000 ETH worth of bids between $159 and $162, amounting to a cost of around $40 million.
Furthermore, multiple pieces of evidence — such as web traffic measured by Alexa, anecdotal stories from friends and family, and order book data — suggest that buy-side demand for Bitcoin is starting to ramp up.
There are some, however, fearing that a deeper drop is on the horizon. Crypto trader Mayne shared the below chart, indicating that Bitcoin is in the midst of falling out of a rising wedge structure, textbook bearish, that was formed when the cryptocurrency hit the $3,000s back in March.
#Bitcoin pic.twitter.com/bIFek9JpHN
— Mayne (@Tradermayne) April 13, 2020
The wedge playing out as it did back in February could see yet another leg to the bear market that Bitcoin is now embroiled in.
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