TLDR
- Retail and whale traders are buying the Bitcoin dip, helping slow the recent sell-off
- Monday saw $1.62 billion in long positions liquidated, the largest single-day liquidation this year
- Sellers continue to dominate price action despite BTC holding above $112,000
- Market lacks aggressive buying volume in both spot and futures markets
- Charts show potential for deeper sell-off with liquidation cluster near $107,000
Bitcoin is currently holding just above the $112,000 level following a major market correction. On Monday, the crypto market experienced its largest single-day long position liquidation of the year, with $1.62 billion in long positions wiped out. As traders attempt to stabilize the market, some analysts are warning that Bitcoin may be entering what they call a “late-cycle phase.”
Data from Hyblock shows that despite BTC briefly maintaining its position above $112,000, sellers continue to dominate the market. The aggregate cumulative volume delta data indicates increasing chances of a deeper sell-off, potentially pushing prices closer to the lower range limits.
Looking deeper at market behavior, the True Retail Longs and Shorts Account metric from Binance reveals that both retail traders and whales have been increasing their leveraged long positions since Monday’s sell-off. The data shows an ongoing battle between buyers and sellers in the market.
When compared against the bid-ask ratio at 10% aggregate orderbook depth, selling pressure appears to be decreasing as Bitcoin attempts to find stability in the $111,000 to $113,000 zone.
Market Structure Points to Weakness
However, Bitcoin bulls aren’t out of danger yet. Liquidation heatmaps show the price eating through underlying bid liquidity, with a larger cluster of potential liquidations sitting around the $107,000 level.
Taking a broader view of Bitcoin-specific market dynamics, the day-to-day price movements have been primarily driven by activity in the perpetual futures market rather than spot buying.
Open interest has fluctuated within the $46 billion to $53 billion range from late July until this week. Apart from recoveries from range lows at $112,000 on August 3 and $107,000 on September 1, there has been little evidence of aggressive buying in spot markets or significant use of long leverage in the perpetual futures market.
Liquidation Risk Remains
This market structure, where long positions appear hesitant to increase volume in both spot and futures markets, creates an opportunity for sellers. Bears may attempt to push prices down into zones where leveraged longs face liquidation risk, specifically in the $110,000 to $106,000 range.
The current situation highlights a cautious market where buyers are present but not confident enough to drive a strong reversal. While retail and whale traders are buying the dip, helping to slow the decline, the overall market lacks the aggressive volume needed for a lasting trend reversal.
Bitcoin’s price action remains within a range, and without increased buying pressure, the market could continue to test lower support levels. The $107,000 level appears particularly important, as it contains a significant cluster of potential liquidations.
Trading volumes show limited enthusiasm from buyers despite the recent dip. This lack of aggressive buying suggests that many traders may be waiting for lower prices before committing substantial capital to the market.
The bid-ask ratio data indicates some stabilization in the current range, but without stronger buying signals, Bitcoin remains vulnerable to further downside pressure.
For now, the market continues its tug-of-war between buyers stepping in at these levels and sellers looking to push prices lower to trigger liquidations.
The most recent data shows Bitcoin trading at $112,610, with buyers fighting to maintain support above the psychologically important $112,000 level.
