After a decline north of $20,000, Bitcoin may be retracing and could soon move down to its last support level. However, the macroeconomic environment has wiped away any bullish momentum. Bitcoin was making some profit earlier this week.
Bitcoin (BTC), currently trades for $19,600. There has been a 2% drop in Bitcoin’s last 24 hours as well as sideways movement throughout the week. All of the cryptocurrency market follows the sentiment, proving once more that any possible rally can be capped by the larger picture.
Bitcoin Takes Out Leverage Longs, Time For A Squeeze?
Justin Bennett an analyst claims that Bitcoin experienced a negative run to $19600. It was lower in order to eliminate leverage players. A cryptocurrency can often move in the opposite direction to most traders. It also makes an attempt at the liquidity pools made by excessive leverage positions.
Retail traders could have taken longs to gain further appreciation in this instance. Bennett believesWith these players gone, it is possible that the market will be poised for a rebound.
As mentioned in Discord yesterday, BTC long liquidations are at $19600. It is time to bounce back up to $20,000. For now, trade both ends of this range.
In general, Bennett has been bullish on Bitcoin and will maintain this biased as long as BTC’s price stays above $18,700. This price represents the bottom possible channel, which was created by cryptocurrency in the recent months.
Recently, price action is pointing to a more prolonged rally towards $26,000. It might be time for short sellers, as leverage is out of play in the near term. The analyst added:
I still think it’s only a matter of time before we see short liquidations run between $20,450 and $20,800. For now, I’m just playing with the range.
Crypto Market Drops Under Macro Forces
How did Bitcoin plummet from its weekly peak? According to a pseudonym trader, it was data about the U.S. job numbers. The U.S. Federal Reserve might be able to support the increase in interest rates, to lower inflation and to reduce risk on assets as a result of this report.
As reported by NewsBTC, the Fed’s monetary policy has been costly for equities and the crypto market moving in tandem with these assets Now, the Job numbers are telling the financial institution that it can keep on applying pressure to the markets.
The trader thinks that Bitcoin’s recent price action is now in sideways mode. This means Bitcoin could avoid any potentially catastrophic downward price actions. This trader is via Twitter said:
This puts us back in the middle of the eternal 18.5-20.5K area and because of this we’re quite a way out from any break out, be it up or down. Unless something special happens I’d say it’s likely we stay within this area roughly until at least the CPI number next Wednesday.