A possible recession is coming in the Bitcoin (BTC) market as merchants prepare for greater volatility after unprecedented movements in the derivative sector.
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Despite a record in the negotiation volume within derivative markets, the spot market activity remains moderate.
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The accumulation of liquidation levels below the $ 100K brand increases the concerns of a waterfall price setback.
This article explores the implications of current market dynamics and the potential for a setback in Bitcoin’s price trajectory, focusing on liquidity trends and negotiation volumes.
Potential indicators Relations in the price of Bitcoin
The cryptocurrency market is full of speculation as Bitcoin recently increased to a historical maximum of $ 111,980 in Binance on May 22. Open interest (OI) in derivatives reached an amazing record of $ 74 billion, which illustrates a significant influx of upward feeling.
However, as Bitcoin continues its ascension, there is a remarkable caution among operators, particularly with a growing number of liquidations that accumulate at crucial levels below $ 100K. This phenomenon causes the question: will prices face a significant recession?
Source: Coinalyze
According to Cinalyze’s data, OI’s trend has stabilized after recent price. Interestingly, although the financing rate was remarkably positive, since then it has returned to Neutral in the last 24 hours, which could indicate an upward impulse cooling.
Evaluate the impact of spot market trends
As highlighted in a Darkfost user publication on cryptocant ideas, the reducing demand in the spot market contrasts with trade volumes of future vibrant, underlining a growing speculative interest. A decrease in the spot volume during the Bitcoin pricing discovery phase indicates that many investors doubt BTC accumulate above the resistance levels previously identified in May, specifically the $ 94K- $ 96K range.
The volatility potential is amplified, with a rally directed by derivatives now at risk of abrupt downward corrections.
Source: Cryptoquant
Potential levels of market resistance and feeling
Analyzing the broader market dynamics, Bitcoin’s price action in the last six months reveals a potential range formation. Merchants now face a critical situation: if the market will embark on a sustained upward trend or will be restored to lower levels, possibly around $ 100K or even $ 93K.
As liquidations near critical levels, volatility can be on the horizon, especially as market participants adjust their positions in advance of the possible profits. A sustained upward trend can find formidable resistance, particularly above $ 113K, given the current feeling exhibited by merchants.
Source: BTC/USDT in TrainingView
Conclusion
In summary, the current Bitcoin market is characterized by a dichotomy between a strong derivative activity and a dazzled spot demand. As liquidity levels accumulate in key thresholds, feeling around a potential setback intensifies. Prepare for changes in market dynamics while recognizing indicators of greater volatility is essential for merchants advance.
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