Bitcoin (BTC) rose 5.01% on Wednesday, setting up the daily high at $86,990, ending weeks of consolidation. However, futures data for BTC and liquidation heatmap models suggest this uptrend could come undone soon.
Let’s explore Bitcoin price predictions and key levels to watch as data hints at a bearish reversal.
Bitcoin Price Rose 5%, But a Crash Seems Likely
Bitcoin rose 5.44% on Wednesday, March 19, from a low of $82,501 and set up a daily high of $86,990. This move pushed it to sweep the previous weekly high of $85,270. As long as BTC stays above this level, the bullish outlook will most likely continue, pushing it higher.
However, the liquidation heatmap mode by CoinGlass suggests that this recent price rally may come undone soon. During Wednesday’s price rally, the liquidity to the upside was swept. Now, the heatmap model shows three key liquidity levels to the downside – $85,000, $81,000, and $77,618, respectively. Combined, these three levels harbor more than $3 million in liquidity. If the buyers fail to sustain Bitcoin price above the key support level of $85K to $84, the chances of a sustained downtrend are high.
While the liquidation model may not be enough to ascertain the directional bias, data from Aggr.Trade shows the recent 5.01% Bitcoin price rally was driven mostly by Perpetuals and not Spot buyers. Often, spot buyers tend to be patient with their investments, and perpetual traders are only in the trade to capitalize on short-term moves. As these perpetual traders unwind their long positions, Bitcoin price could crash, undoing the recent move to $87.5K.
Moreover, the Spot buyer CVD is dropping since the peak a few hours ago, showing that spot buyers are actively selling, which adds credence to a potential bearish reversal for Bitcoin price.
With key events such as interest rate decision and Fed’s FOMC meeting behind us, the crypto markets could show its actual intention – up only or more chop?
The post 3 Key Liquidation Levels, 1 Critical Reason Predict Why Bitcoin Price Will Crash Soon appeared first on CoinGape.
