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Liquidation

Bulls LiquidatedThere is one thing that beginner traders rarely understand about bull markets. Traders can lose money in a bull market as much as in a bear market. This week reminded us about the brutal volatility that makes crypto both loved and feared. The market briefly went into a tailspin after a rejection just above the $69,000 previous all-time high. The Bitcoin price then found its feet again and marched back up. But not without liquidating many a trader with an aggressive leverage long position in place. Bull markets in crypto are prone to rapid and steep drops, which they usually recover quickly from. Areas of heavy selling trigger these drops, which causes other traders to sell even more, resulting in a cascading effect. One of these areas was the previous Bitcoin All-Time-High price. Spot trading would not be affected, but slight drops in price breaks highly leveraged bets because there isn't enough collateral to cover their declining positions. This leads to more sales and forced closings. We saw the first major instance of a "liquidation cascade" on Tuesday in this bull market. The event removed over $3 billion of open interest in Bitcoin, making it the largest liquidation event in the last six months. The funding rate requires 'cleansing' to maintain longer-term price movements. Funding rates are used in futures markets where leverage can encourage either long or short positions. The futures price of the asset will match the index spot price. Before the reset, Funding for all assets sat at around 100% APR. After the initial drop, the rate dropped to 20% APR within a few hours. Shorting becomes less attractive and profitable when funding is lower. But higher funding rates are likely to continue. BTC and other currencies will be longed once again by traders as they strive for new highs. That is the formula of a bull market. In previous cycles, price corrections were accompanied by a certain amount of confidence gain due to the need for resetting funding rates. This cycle, however, the seemingly endless spot demand from ETFs provided an additional layer of comfort. Blackrock's IBIT experienced $788 million of inflows on Tuesday this week - a new record. The ETFs' combined net inflows totalled $648 million - their third highest. The trading volume of ETFs has also surpassed $10 billion, with traders taking advantage of the volatility. Unsurprisingly, traders quickly bought up the price dip. We remain firmly in Bull Market territory. But keep in mind, if you overleverage your position, you could live to regret it.
Long
by Coinrule
1
Coinbase Denies Retail Buy-In at 59-60k!Traders, I've been seeing a ton of traders who wanted to buy BTC at 59-60k but their transaction "failed". There is a reason why I am now calling BTC, Blackrock Trading Coin and why I have been extra cynical and skeptical about Blackrock's crypto trading exchange, Coinbase, as well as their entry into the crypto space via ETF. But I won't get into conjecture or conspiracy here. Just watch. You'll witness more shenanigans just like this the higher price goes. Anyways, we can use Coinbase's buying rejection at 59-60k as further proof that this was the bottom of our liquidation flush. Notice how on my chart the wick down touched exactly that top ascending purple trend line. Once hit, we quickly bounced back above my multi-year ascending support/resistance (now support) trend line from 2019. As long as we stay above this line, I am completely comfortable and confident that our upward journey will continue. Remember, there is no escaping the math here. ETFs are simply demanding far more than miners can produce. Only 24% of BTC remains liquid. And there is burgeoning institutional demand for BTC ETFs in a growing number of countries. All this before halving. There is no way to get around these fundamental facts. Fundamentals supersede technical analysis in this case. And this is coming from someone who touts technical analysis most of the time. Fundamentals are priority but we can see that technicals are supporting fundamentals. Look also at that RSI. Finally, it gets a break and is able to drop back below overbought territory. Altcoin RSI readings look even better. I suspect when all the dust settles and price closes out this candle we may even be back above that 64.8k support. But if we're not and we settle anywhere above my multi-year line of support, I remain bullishly biased and expect us to hit our inverse H&S target of 79k soon. Best, Stewdamus
INDEX:BTCUSDLong
by stewdamus
BTC - Analyzing Order Blocks to Predict Liquidations / Stop HuntHello all, I’d like to provide a visual representation of a method we can use to understand and predict stop hunts / liquidation moves on bitcoin - these mysterious and hard to capture phenomenon we all experience at seemingly random times. Here I show blocks of orders - which I separate if we have a candle retracement overlapping the block. We can see this mass chain of red order blocks on my chart. What these are - are long position stop losses. To understand the significance of these orders let’s break down the mechanics of these orders. Long stop losses are: 1) Limit sell orders 2) Orders that don’t automatically fill if price is above the sell price (unlike limit sells) 3) Leveraged orders - using traders liquidity with a leveraged multiplier to increase position size When dealing with “leveraged” order sizes - we can also leverage / multiply the speed, power, and velocity of chart movement as these orders are filled. If we can assume an average leverage usage of 20x - We can speculate a price movement of 20x speed, power, and velocity. With this information - we can look at bitcoin on the large time frames - in this case the multi-day. Identifying chart patterns, we can estimate the timing of movements by dividing the suspected speed of these moves by approximately 20. This allows us to speculate these very fast moves on bitcoin, which are essentially as simple as this description: What are stop hunts and liquidations? 1) The result of retail traders stop loss orders being triggered and creating automatic chain reactions of order fulfillment 2) Order blocks being filled and triggered at multiplied speed and power 3) Not forced manipulation - but a natural occurrence of the consequence of a futures dominated market and large order gaps left intact on the chart Looking back at bitcoin we can see this phenomenon happen time and time again. 1) Consolidation / long steady movements accumulating stop loss orders 2) A fast and large candle in the opposite direction as these stop loss orders are triggered and executed Additionally we can understand the benefits of these pheonomons to the exchanges and market makers. Liquidations return your entire trading position to these for profit companies - so there is a clearly defined benefit to executing these moves to the platforms we trade on. Further more - creating automatic movements that generate high speed and velocity triggers an error known as slippage - price moves so fast that it doesn’t allow adequate time for the stop loss order to execute before the liquidation of a leveraged trade is triggered first - resulting in liquidation with a stop loss in place. HOPE THATS HELPFUL AND GOD BLESS
Short
by DickDandy
Mock Up Price Action for BTC | Near-Mid Term (12HR)Mock Up Price Action for BINANCE:BTCUSDT | Near-Mid Term (12HR) - Watching and waiting for THE opportunities to enter short - Anticipating highly volatile but still overall bullish upcoming week into end of month January before early February and throughout a proper market correction and pullback of BTC and top 200 ALTs - Accumulating small and micro cap ALTs to hedge against market correction/pullback period to begin in earnest within the next 30 days and lasting up to and through the BTC halving event in April - KUCOIN:VELOUSDT KUCOIN:VRAUSDT KUCOIN:TELUSDT BITTREX:BAXUSDT KUCOIN:BLOKUSDT are some of my main picks, in order of preference, all of which with massive profit potential within the next 90 days - With any luck, these small/micro cap ALTs will run over the next 75 days, while BTC and the rest of the broader market top 100-200 ALTs by market cap take a nose dive into the dirt and cool down for a while - End result, flush with profits from small/micro cap plays, at time when my primary investment interest coins like OKX:CSPRUSDT and BINANCE:XRPUSDT are at discount prices, for the last time, before the Crypto bull market starts in earnest May/June timeframe Personal Approach & Base Chart Setup - Stacked Parallel Channels for Grid of Confluence Points - High Time Frame (HTF) Fib Extensions, Retracements, & Time Cycles - Red Filled Horizontal Rectangles between areas of major Fib level from Extensions and Retracements - Teal Filled Horizontal Rectangles are areas of major support and price points for further DCA long order accumulation - Price Label Callout with Red Circle highlighting points of interest where I'd consider making a trade - I will consistently monitor and adjust taking into consideration long/mid/near term price action and market conditions/news Additional Remarks I don't think BTC is done yet. I think that the CME Futures on BTC that are set to expire end of month, have too much money on the table with bets around 50k and 60k. I think we're in the midst of bear trap soon to be turned to be bull trap, and a ridiculously volatile period up and down with retail traders positioned to get hit hard. I'll be on the sideline steadily accumulating my top 40 altcoins list to be held for the next 8 to 12 months. For my portfolio right now leading into the next 90 days, I currently have a heavier skew in active positions for Small Cap and Micro Cap ALTs like VELO VRA BAX and TEL which we know and have seen time and time again always perform well when broader market as a whole starts to pull back and money flows out of large and mid caps in the top 200, into guess what, small and micro caps that underperformed the market till now. Once a heavy market correction begins, nothing will be immune, and I'd expect all things to pull back.. However I believe these small and micro cap alts poised for bullish runs through April/May, will not be hit as hard, and will most certainly bounce back faster, harder, and likely this bounce back will kick off in earnest very big bullish movements for these. My Top Picks to Weather the Impending Storm VELO INVERSE VELO VRA INVERSE VRA BAX INVERSE BAX TEL INVERSE TEL
by Trevictus
2
How Manipulations will help us to get 50K ?? In the ever-evolving landscape of Bitcoin trading, the king of cryptocurrencies is showcasing a strategic dance within an ascending range. Bitcoin's adept utilization of liquidity grabs, especially the recent one from the lower end of the range, sets the stage for a potential surge towards the $50,000 mark. Key Observations: Ascension in an Ascending Range: Bitcoin is currently navigating an ascending range, a pattern characterized by higher lows and higher highs. This range-bound behavior provides a fertile ground for tactical maneuvers that capitalize on liquidity imbalances. Liquidity Grabs as a Strategic Play: Bitcoin has been adeptly executing liquidity grabs, feigning breakouts to capture liquidity from both ends of the range. These maneuvers not only create volatility but also serve as a means to accelerate price movements. Recent Liquidity Grab from the Lower Range: Fakeout Below Support: Bitcoin recently executed a fakeout below the lower boundary of the range, triggering concerns of a breakdown. This move lured in sellers and initiated a cascade of stop-loss orders. Strategic Liquidation and Bounce: The fakeout led to the liquidation of short positions, providing liquidity for savvy market participants. Bitcoin swiftly bounced back, recapturing the lower boundary and leaving in its wake a trail of squeezed short positions. Implications and Future Outlook: Speeding Towards $50,000: The recent liquidity grab from the lower range, coupled with the subsequent rebound, sets the stage for a potential surge. Bitcoin enthusiasts and traders are eyeing the $50,000 level as the next significant milestone. Volatility Breeds Opportunities: The series of liquidity grabs within the ascending range create an environment ripe for traders to capitalize on short-term fluctuations. Traders employing nimble strategies can leverage the heightened volatility for tactical entries and exits. Strategies for Traders: Range-Bound Strategies: Traders can consider range-bound strategies, anticipating bounces from support and resistance levels within the ascending range. Monitoring Key Levels: Keep a watchful eye on key levels within the range, as breakouts or breakdowns from these levels could signal the next directional move. Conclusion: Navigating Bitcoin's Liquidity Chessboard Bitcoin's adept utilization of liquidity grabs within the ascending range reveals a nuanced approach to market dynamics. As the cryptocurrency aims for the $50,000 threshold, traders should stay vigilant, ready to adapt their strategies to the unfolding chessboard of liquidity. 🌊 Ascending Range Tactics | 🚀 Strategic Liquidity Grabs | 💡 Navigating Volatility for Profits 💬 Share your insights on Bitcoin's recent moves and your strategies for navigating its journey towards $50,000! 🌐✨
Long
by Yaroslav_Krasko