On September 4, 2024, Bitcoin (BTC), the world’s largest cryptocurrency, broke through its critical support level of $57,000, hitting a low of $55,670, according to CoinMarketCap data. However, the BTC price quickly recovered, returning to levels around $56,800.
$100 million for liquidation
This significant price swing in the last few hours has liquidated more than $100 million in long and short positions. Most of the liquidation has come from the long side. Of the $100 million in liquidations, bulls have liquidated $91.35 million worth of long positions, while short sellers have seen $8.57 million worth of liquidations, according to blockchain analytics firm CoinGlass.
Despite the recent market recovery from $55,670 to $56,800, it appears that BTC has entered a phase where the asset market is dominated by short sellers who could potentially liquidate more long positions.
Bitcoin Technical Analysis and Upcoming Levels
According to expert technical analysis, BTC has become extremely bearish, with a high probability of a drop to the $54,000 level. The recent price drop has not only broken through an important support level, but also broken the weekly consolidation near the support area, which is a bearish sign.
This is the first time since August 8, 2024 that BTC has fallen below $56,000. Despite this massive price drop and decisive breakout, technical indicators such as the relative strength index (RSI) and stochastics remain neutral, according to CryptoQuant.
Key areas of elimination
Currently, the main liquidation areas are near $56,270 at the bottom and $57,130 at the top as day traders are overextended at these levels, according to CoinGlass’ Bitcoin exchange liquidation map.
If market sentiment remains bearish and BTC falls to $56,270, long positions worth about $260 million will be liquidated. Conversely, if sentiment changes and the price rises to $57,130, short positions worth about $215 million will be liquidated.
At press time, BTC is trading around $56,650 and has lost more than 5% in the last 24 hours. Meanwhile, its open interest has dropped 4% in the last four hours, indicating significant liquidations due to the recent breakout of important support levels.
