New analysis warns that Bitcoin (BTC) may continue to fall in the short term after the $ 40,000 support disappears.
In the latest market review on Friday, analyst Filbfilb for trading group at Decentrader expressed concern that $ 290 million a day in liquidations is not enough to avoid another stumble.
Next stop: $ 33,000 utilization elimination
After reversing to $ 38,250 overnight, BTC / USD looked downright unhealthy at the time of writing, making new lows before Wall Street opened.
Cryptocurrency liquidations have passed $ 720 million per day, but for Filbfilb this is a historically low figure, and since liquidity is probably concentrated below $ 38,000, the chances of a number are clear.
“Liquidations after falling below $ 40,000 have been low so far and do not show up in the big setup. At the same time, funding has remained relatively flat, which means that bears surpass margin traders, which is almost all. Underwater”.
“We’ve been talking about cash that will probably be under $ 38,000 for a while.”
If the spot price starts to cancel mortgaged positions, the next stop for “relief” will be $ 33,000. Update continued:
“If the $ 38,000 level falls with some increased momentum, we expect a liquidation event similar to what happened on December 4, 2021 and a move towards $ 33,000 first, possibly marking a 100-week moving average of $ 31,500.” “But $ 33,000 is also a potential level of relief.”
Such a result would cause Bitcoin to put an end to counterfeiting since July, when it reached a low of just under $ 30,000 – close to the opening price in 2021 – before recovering.
An illustrative BTC / USD chart showing liquidity in blue (screenshot). Source: Decentrader
Daily closing over $ 40,000 is required to start recovery
At the same time, to ensure greater heights, everything must change dramatically.
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The slight increase should be accompanied by negative financing rates, which indicates that the units with the shortest maturities were in a similar distrust of the resilience to the decline. Philip argued that the relationship between long and short positions should also gradually decline.
He concluded that a daily closing above $ 40,000 could contribute to such a scenario to some degree.
At the time of writing, BTC / USD is hovering around $ 37,900, and volatility is picking up again, as data from Cointelegraph Markets Pro and TradingView shows.