Get Ready For A Bitcoin Short Squeeze? Longs Pile Up As BTC Struggles

Bitcoin has been hinting at lower levels during today’s trading session. The benchmark cryptocurrency was rejected at around $48,000 and was unable to regain its previous highs.

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At the time of writing, Bitcoin is trading at $43,100 with a loss of 1% and 5% in the last 24 hours and 7 days, respectively.

BTC is indicating further losses on the 4-hour chart. source: BTCUSD TradingView

Data from Material Indicators records little support for BTC price as it moves in a narrow range between $42,500 and $43,500. The benchmark cryptocurrency has been losing buy orders that could absorb bearish price action in the future.

As the chart below shows, BTC had around $10 million in bid requests pulled as the cryptocurrency headed to the downside. It appears that this liquidity has been distributed between $42,000, $41,500 and $41,000 which could act as a last line of defense against a fresh bear attack.

Bitcoin BTC BTCUSD 2
BTC price losses support around $42,000. Source: Material Indicators

The chart also shows how the entity placed strategic orders when BTC price attempted to recover its previous levels. This happened when investors requested orders around $100,000 that pushed the price of BTC to a low of $40,000.

The biggest sellers of this current price action appear to be retail and ordering investors around $10,000 (in yellow and red in the chart below). Only investors with buy orders around $1,000 (in green in the chart) seem to have shown interest in buying at the price of bitcoin.

The big sellers (purple) are trying to push the bitcoin price down. Source: Material Indicators

The above points to a potentially large entity trying to push the BTC price down to accumulate BTC at optimum levels. The distribution of liquidity was focused first at $42,000 and then distributed among those levels, and it seems that $40,000 supports this thesis.

BTC whales often use this method to trap hashes and get cash to take their positions. Small investors seem to have taken the bait.

Bitcoin whales play mind games

Analyst Ali Martinez has shown an increase in the number of long trades being taken on the Binance Crypto Exchange. The buy/sell ratio is 70% for long traders and 29% for the other side of the trade.

Related reading | More patch soon? Bitcoin whale percentage still high

The analyst commented on the following about the potential impact on the price of BTC:

Bitcoin could prepare for a waterfall of liquidation! 70.69% of all trading accounts on Binance Futures are currently net long on BTC in USD, which could lead to a prolonged squeeze. BTC could drop to $42,000 – $41,000 to collect liquidity.

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