Bitcoin pushes back above $60k: How THIS group helped BTC
Bitcoin has demonstrated low demand in the last few days, which gave way to some downside expectations.
- Over $2.5 billion worth of Bitcoin shorts liquidations were reportedly behind the slight recovery.
- BTC is expected to be more volatile towards the end of the week as sentiment improves.
Bitcoin [BTC] was back above $60,000 once again as sentiment improved slightly. Leveraged shorts liquidations may have had something to do with the slightly bullish outcome.
Bitcoin and overall crypto market sentiment was in extreme fear during the weekend, but there was some recovery in the last three days.
The latest data from the fear and greed index indicated a gradual recovery, with the index at 30 as per press time readings.
Bitcoin’s bullish momentum may have also been fueled by the liquidation of leveraged short positions. Recent data suggested that over $2.5 billion worth of leveraged short positions were recently liquidated.
This resulted in some buying pressure.
On-chain data from CryptoQuant showed that Bitcoin registered a 231% surge in shorts liquidations on the 12th of August. The appetite for leverage briefly tanked to 2-month lows before adopting an uptrend.
After evaluating Bitcoin’s heatmap, we found that there were 81.5 million net longs on Binance between $60,852 and $60,880.
This, combined with the surge in the uptick in estimated leverage ratio, as well as the improving sentiment, suggested a gradual shift towards bullish optimism.
Is Bitcoin headed for more volatility ahead?
Bitcoin had a $60,890 price tag at press time. A higher push will see it retest the $61,700 level, where it has been facing resistance and low demand lately.
Unsurprisingly, this price range also coincided with the 50% RSI level. This would explain why shorts were loading up near this level, in anticipation of more downside.
A cocktail of low demand and shorts liquidations has kept prices within a narrow range for the last few days. However, there may also be a third reason.
The market tends to experience low activity ahead of major economic data. Followed by a surge in activity as a reaction when the data is released.
The market has been looking forward to multiple economic data this week. This includes producer price data (PPI), which was released yesterday.
CPI data slated to come out today may trigger more volatility and potentially a strong directional move out of the current range.
Read Bitcoin’s [BTC] Price Prediction 2024-25
Bitcoin’s current level highlighted the state of uncertainty in the market. The surge in leverage short positions suggests growing bearish expectations.
On the other hand, the market sentiment appeared to be improving in the last few days. This signals a significant probability of a rally beyond the current resistance.
