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Bitcoin and the liquidation map: Where is the market being drawn to?
Bitcoin and the liquidation map: Where is the market being drawn to?
When I look at the liquidation chart of Bitcoin $BTC recently, the first feeling is that the market is being 'pulled' by quite clear liquidity clusters on both sides. These areas are often not just simple price levels, but places where a large amount of leveraged positions can be liquidated if the price moves strong enough.
Currently, the largest liquidation cluster is at the bottom, stretching from about 62,200 USD to nearly 54,000 USD.
As I understand it, this entire area contains many long positions using leverage. This makes the area a 'liquidity magnet' since the market tends to sweep through places with a concentration of liquidation orders like this.
Above, the notable liquidity zone is again located at the recent peak. This area starts from around 74,000 USD and extends to nearly 81,000 USD.
If the price breaks through the current resistance zone and starts to rise strongly, this could be where short positions are forced to close, creating a series of liquidations upwards.
At the time I observed, the price of Bitcoin is facing quite a lot of difficulties around the POC area on the 1-hour frame.
This is usually the temporary equilibrium zone of the market. If there is a clear recovery from here, I think the price has the potential to move towards the 69.4k and 70.6k regions.
These two levels also coincide with important TPO areas on the chart, where the market has previously spent a lot of time trading.
The question I am asking myself is: will Bitcoin be pulled down to the liquidation cluster below first, or will the market choose the less expected path and break upwards?
#BTC