Bitcoin is trending sideways into the long U.S. weekend with the price of BTC compressing around $19,500 and $20,500. The support around the lower zone of this range might be tested as the number one cryptocurrency struggles to preserve its current levels.
At the time of writing, Bitcoin (BTC) trades at $19,900 with a 1.4% profit over the past 7 days and sideways price action in the last 24 hours. BTC’s price is heavily underperforming other cryptocurrencies as Ethereum (11%), Cardano (14%), and Polkadot (10%), recorded significant profits over the same period.
Data from Material Indicators hints at a potential local top for Bitcoin on low timeframes as ask (sell) liquidity gets thicker around its immediate levels. Selling orders have swelled over the past week as Bitcoin trades sideways and might operate as resistance preventing BTC to reclaim the area north of $20,000.
As seen in the chart below, as ask liquidity increases, bid (buy) orders fade around $19,500 contributing to the weakening of this key level, on low timeframes. The next immediate support is $19,000 which currently holds around $15 million in buy orders.
The spike in ask liquidity correlates with an increase in selling pressure from small investors to Bitcoin whales. As the price of Bitcoin trended to the upside in August, larger players took advantage of the relief and “dumped” into the market.
Smaller investors followed, but with a slower reaction. Bitcoin whales have remained flat with bid orders of around $100,000 showing a small uptick.
Additional data from a recent Glassnode report coincides with Material Indicators, Bitcoin whales have been selling their coins as the price of Bitcoin trends to the upside. This is a part of a second distribution phase experience by the crypto market following a capitulation event. Glassnode noted:
Following months of accumulation, the market managed to rally above $24k, however as covered in WoC 34 and WoC 35, this opportunity for exit liquidity was taken via distribution, and profit taking.
Can Bitcoin Reclaim $20,000 In The Short Term?
The key area of resistance is $24,000, as mentioned above, and $24,500 as whales with over 10,000 BTC are using this zone to “aggressively distribute coins into the range”, the report noted. Bulls must push above these levels to prevent further downside and possibly regain some of the bullish momentum.
As a pseudonym users have been noticing, that short positions have been piling up as Bitcoin moves around support between $19,500. Over the past week, the market has liquidated millions from wiped-out shorts as BTC’s price trends closer to $20,000.
This might provide the market with enough ammunition for a short squeeze above $20,000 and into the areas of critical resistance.
It took only a 2% pump for $200 mil in shorts on Binance to fold.
What in tarnation are these guys doing. pic.twitter.com/Zn4g6qvBpm
— Byzantine General (@ByzGeneral) September 5, 2022