Key Points:
- Bitcoin dipped over 2% from its daily peak, indicating expected market movements.
- Despite this, forecasts suggest a potential more significant downturn.
- With Altcoin Open Interest hitting new records, signs of “froth” are emerging in the crypto market.
Bitcoin traders noticed a fresh target for price lows, aiming for buy liquidity as Wall Street opened on Wednesday.
According to data from Cointelegraph Markets Pro and TradingView, Bitcoin is expected to drop by more than 2% for the day.
The price briefly crossed the $120,000 threshold at market opening, but that momentum waned swiftly as selling pressure took precedence.
Earlier reports highlighted liquidity within the exchange order book, hinting at a potential retreat to the $117,500 level.
$ BTC / #bitcoin
In the last 24 hours, 176,570 traders faced liquidation, with the total amount reaching $517.65 million. The largest single liquidation occurred at Binance, totaling $3.97 million.
In total, $1.1 billion has been lost.
With more than $500 million in liquidations within the past day, new liquidity appears to be nearing current spot prices, as indicated by Coinglass data.
“There’s significant liquidity in leveraged positions,” Coinglass mentioned in a previous post directed at its followers.
Market participants are starting to feel that they might recover BTC prices and build additional support.
“What we’re seeing at $BTC isn’t a real breakout,” commented Crypto Trader and analyst Michaël Vande Poppe regarding the recent peak at $120,000. “The liquidity has been depleted, so it’s likely we go back to retesting lower ranges.”
Popular trader Crypto Virtuos suggested that a target of $113,000 is on the horizon, thanks to a critical Fibonacci retracement level in play.
“I think we could see a brief retracement, maybe around 6-7%, which might push the price up to the .618 level at $113K,” he noted.
Another analyst, Crypto Awruous, expressed optimism about a rebound, with Fibonacci patterns indicating a potential target of $138,000.
Warning About Altcoin “Froth”
Meanwhile, GlassNode, an on-chain analytics firm, has issued a warning regarding potential “bubbles” in the crypto market due to the recent surge in altcoins.
They pointed out that the exceptionally high levels of open interest in derivatives trading carry notable risks.
“These conditions suggest emerging bubbles, making the market vulnerable to sharp fluctuations,” they cautioned in their latest newsletter, The Week Onchain.
“Leverage tends to exaggerate both upward and downward volatility, which could create a more susceptible trading environment.”
Data from GlassNode also confirmed that the open interest for the four largest altcoins by market cap exceeded $40 billion on Monday—setting a new all-time high.
This article does not offer investment advice. All trading comes with risks, and readers are encouraged to do their own research when considering their options.
