Crypto traders face $250M wipeout as Bitcoin price volatility intensifies
Traders face significant liquidations on both sides of the market as Bitcoin maintains trading activity near $70,000, with technical analysts forecasting a potential retest of local support levels.
As Tuesday's Wall Street trading session commenced, Bitcoin (BTC) maintained its focus on multiday lows while market observers cautioned that bearish forces were attempting to "regain control."
Key points:
- Bitcoin is setting up a support retest at the bottom of its local range, says analysis.
- Bears want "control" again, with liquidations impacting both long and short traders.
- An ongoing lack of demand is adding to Bitcoin bulls' problems.
Bears battle for local BTC price trend
According to information from TradingView, BTC price experienced a 2.3% decline over the daily period, placing $68,500 in the spotlight as a critical level.
As a component of a confined local trading range, this price point continued to carry weight for market traders monitoring liquidation events across exchanges.
Liquidation figures stayed elevated notwithstanding the relatively subdued price movements, with CoinGlass data showing more than $250 million wiped out throughout the cryptocurrency sector during the 24-hour period leading up to the reporting time.
"$BTC pumped to $71,000 yesterday liquidating $130M shorts. Then, $BTC dumps straight back to $68,000 liquidating another $150M longs," CryptoReviewing, the pseudonymous cofounder of trading community Wealth Capital, wrote in a post on X.
"Now, above at $72,000 - $74,000 we still have large liquidity waiting to be taken. However, at $66,000 - $68,000 we have even larger leveraged liquidity building up making this the higher-probability zone for a sweep next."
A corresponding visualization illustrated the substantial liquidation risk existing on either side of the current spot price.
"Bears are attempting to regain control," CryptoReviewing added.
Previously, trading resource Material Indicators issued a warning that Bitcoin was positioned for a lower-time frame support retest.
"FireCharts binned CVD shows purple whales continued selling over the last 24 hours," it told X followers, referencing one of its proprietary trading tools.
"Things are setting up for $BTC to grind its way into a retest of local support."
Bitcoin faces "weakening" seller absorption
Building upon the theme of sellers returning to the market, blockchain analytics platform CryptoQuant issued a warning regarding insufficient new investor capital to counterbalance exchange inflows.
Bitcoin seemed trapped in a negative cycle driven by a deficiency of "apparent demand growth."
"Despite the increase in coins being spent, fresh capital inflows are not expanding at the same pace," contributor CryptoZeno wrote in a "Quicktake" blog post Tuesday.
"Demand has slipped into negative territory, signaling that the market's ability to absorb distributed supply is weakening. Similar divergences in prior cycles often marked transition phases where bullish momentum slowed before either consolidation or correction unfolded."
In a previous report, Cointelegraph covered the turbulence affecting Bitcoin miners as they increased their inflows to exchanges in order to cover expenses.
Predictions of an extended Bitcoin bear market, meanwhile, continue to gain popularity.
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