Bitcoin retraces to the $93K-$96K range, aligned with the 61.8% Fibonacci retracement.
RSI indicates oversold levels, with early bullish divergences appearing on shorter timeframes.
Significant liquidation clusters around $93K-$96K could lead to further downside if breached.
Bitcoin is now at a vital support level while market conditions sees a mix of both bullish and then short term bearish. Traders are watching indicators to assess the market's next move, because the expected rebound hasn't happened yet.
Liquidity and Leveraged Longs
The market has already seen a reduction in liquidity, with most of it taken out. However, a number of long positions remain open. If Bitcoin drops below the $93,000 mark, these positions could face liquidation, likely leading to further downside pressure.
According to a post by Stock Money Lizard, the heatmap highlights significant liquidation levels, with key clusters of leveraged positions around $96,000 and $93,000. Bitcoin's price retraced to the 61.8% Fibonacci level, indicating a crucial support zone.
The RSI on the lower panel reflects oversold conditions, suggesting reduced selling pressure. Liquidations intensified during price drops, as seen in highlighted zones. The data underscores the importance of the $93,000-$96,000 range as a key level for leveraged positions and potential price stabilization amid heavy market activity.
Fibonacci Retracement and Key Levels
At this very moment, it is currently resting at the 61.8% Fibonacci retracement level of its recent uptrend. It’s a commonly viewed support level in technical analysis, the idea being that the current price zone could be a pivot point in the market.
On shorter timeframes, such as the 1-hour and 2-hour charts, Bitcoin is showing oversold conditions. Additionally, the first signs of bullish divergence are emerging in the 1-hour timeframe. These indicators often precede a reversal in price, providing some optimism for a potential recovery.
While there remains some downside risk, the market conditions suggest a high probability of Bitcoin hitting a local bottom at current levels. Traders are advised to keep a close watch on key support levels and monitor whether the oversold conditions and bullish divergences translate into upward momentum.
