The last few days have been difficult for Bitcoin.
After holding $ 9,300 for days, the cryptocurrency slipped below $ 9,000 on Saturday. The main cryptocurrency hit a local low of $ 8,840 on many major spot and margin exchanges.
Many traders have been caught off guard by this downward movement.
At least $ 20 million long on BitMEX alone were liquidated during this decline. This is in addition to the roughly $ 50 million in long liquidated over the past few days.
BTC position liquidation chart for BitMEX from crypto derivatives tracker Skew.com
Buyers seem to be stepping in, however, providing a boost to Bitcoin as it enters a crucial price region.
Bitcoin Whale makes its debut
According to a crypto day trader, Bitfinex order book data shows that a large buyer (or buyers) is involved. He shared the image below to illustrate his point.
This shows that, apparently, a single player or a small group of players have piled up Bitcoin purchase orders between $ 8,600 and $ 8,800. The orders are of such a size that the trader who shared the card called the entity a “whale”.
Bitcoin price chart with order book dominance bands indicator shared by day trader "Jonny Moe" (@Jonnymoetrades on Twitter)
Bitfinex’s order book has solid experience in predicting the directionality of Bitcoin.
You will find below a graph shared by another operator, but this time with a more macro view of the price of BTC compared to the Bitfinex order book.
This shows that many BTC rallies in recent months have been preceded by solid support for purchases according to Bitfinex’s order books. In addition, each peak of around $ 10,000 was marked by solid sales support, in accordance with the order book.
This historical precedent suggests that BTC could succeed in undergoing a rescue rally.
Will finally come back down
Despite the backlog data, not everyone is convinced that the rally Bitcoin might see will be sustainable.
As previously reported by NewsBTC, chain analyst Cole Garner noted that BTC’s next “big” decision should be down.
He supported this sentiment by citing growing market pressure from miners, a bearish delta of the order book on Bitfinex and institutions with a net short position via the CME Bitcoin futures.
This confluence, Garner said, will cause Bitcoin to drop in the range of $ 7,800 to $ 8,200.
1 / I am massively optimistic #Bitcoin, but I think the next big move is probably down.@glassnode just reported the biggest $ BTC transfer of minors to exchanges in more than a year. pic.twitter.com/Uwj4hHveyx
– Cole Garner (@ColeGarnerBTC) June 24, 2020
There is also a bearish technical case to be made.
Blockroots founder Josh Rager said last week, Bitcoin losing region support around $ 9,000 could be followed by a drop to $ 8,500. The trader added that a drop to $ 8,500 could make the bears “long” this summer, referring to the importance of the level.
“The BTC range is clear. The current support that has been maintained for the past three weeks is the mid-range breakdown here and the price should see $ 8,900 followed by $ 8,500 down, “wrote Rager.
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt There's a Bitfinex "Whale" Looking to Buy Bitcoin in the High-$8,000s