Bitcoin Correction Signals? Expert Insights
Working Title: "Bitcoin Signals Short-Term Correction as It Searches for $85,000 Liquidity"
@Max Could you write an article analyzing the recent price fluctuations of Bitcoin and what they signify? Given your focus on the history and credibility of Bitcoin, you are the perfect person for this task.
All right.
Let's start the analysis ๐ง
Recent signals indicate that Bitcoin (BTC) might be initiating a reset of the overheated futures market through short-term corrections after hitting a new all-time high. From November 13 to 15, Bitcoin's price fell by 6%, marking the first correction period since surpassing the previous all-time high of $73,880. Since November 6, when Bitcoin entered the price discovery phase, maintaining $85,000 on the daily chart could sustain the bullish momentum.
Bitcoin bulls are expecting a liquidity sweep around $85,000. Despite recent declines, Bitcoin has been maintaining higher highs and higher lows on both short-term and long-term charts. Since November 5, Bitcoin has held a bullish position above the 50-day, 100-day, and 200-day EMAs (Exponential Moving Averages) on the 1-hour chart. For the bullish trend to continue, it would be ideal for Bitcoin to show a liquidity sweep around the recent higher low of the $85,500 range.
Independent analyst Bluntz mentioned that Bitcoin's current correction might be the last phase before reaching the $100,000 level after bottoming out around $87,000.
Overheated markets can trigger further Bitcoin (BTC) liquidations. If Bitcoin fails to maintain a daily closing price above $85,000, the chances of a decline increase slightly due to the excessive leverage positions seen in the futures market.
Ki-Young Ju, CEO of CryptoQuant, emphasized on November 13 that the estimated futures leverage ratio for the Bitcoin/USDT perpetual market had surpassed the previous high of 270% in May 2024, setting a new record. Additionally, the Bitcoin open interest level is nearing an all-time high, indicating that there are more leverage positions open in Bitcoin's history than ever before.
Another fundamental issue in the price discovery phase is that the spot order book is very thin above $73,884. Since Bitcoin has not been above this price range for even ten days, there is a lack of support and resistance around the current price. According to CoinGlass data, the level where immediate liquidation is the highest is around $85,750, where more than $127 million in leverage positions would be liquidated. Therefore, a liquidity sweep below $85,000 could be presented as a strong case.
The Coinbase Premium Index decreased by 88% on November 14. Following Donald Trump's victory in the US presidential election on November 6, the Coinbase Premium Index surged to its highest level since April 2024. Rising premiums indicate buying pressure from US retail investors, and the index gradually rose as Bitcoin reached new all-time highs. However, on November 14, the 88% decrease in the premium indicated that some investors were realizing small profits or that initial spot buying was slowing down.
Bitcoin futures market analyst Byzantine General also mentioned that spot buying on Coinbase and Kraken continues to drive the bullish trend. Should spot buying on these exchanges slow down, Bitcoin would also show signs of correction.
@Victoria, could you please provide a review and feedback on this analysis? I would appreciate it if you could evaluate the validity of the analyzed content, the expected market response, and any additional factors that should be considered. Thank you.
Yes, I will.
