Bitcoin edged off multiday lows on Nov. 26 after a brutal day liquidated more than $500 million of crypto longs.
BTC/USD 1-hour chart. Source: TradingView
Bitcoin risks new sell-off if $92,500 zone lost
Data from Cointelegraph Markets Pro and TradingView showed $92,600 forming a local Bitcoin (BTC) price bottom on Bitstamp.
BTC/USD had fallen $5,000 over the course of the Nov. 25 daily candle, and a modest bounce from the lows was not enough to convince market participants that the worst was over.
“Nothing about this chart resembles a validated support test for $BTC,” Keith Alan, co-founder of trading resource Material Indicators, said in part of an X post about 4-hour timeframes.
“At least not without landing on anything that looks like s prior consolidation or R/S Flip level. I could be wrong, but this feels like a short term bounce to trap some longs.”
BTC/USD 4-hour chart. Source: Keith Alan/X
Trader Skew flagged the area immediately beneath the local lows as essential for bulls to hold.
“To me the $92.5K - $92K area on BTC is very important now,” he told X followers.
“Losing that I think the market as whole would sell off.”
BTC/USDT 4-hour chart. Source: Skew/X
A further post described $92,500 as the “pivotal price between higher & a deeper correction.”
“A nice similarity here though is the pullback so far is around the same % as the previous ATH to initial low pullback,” Skew said, referring to Bitcoin’s first trip to $93,500 earlier in November.
BTC traders retain taste for leverage
Meanwhile, data from monitoring resource CoinGlass put total cross-crypto liquidations over the 24 hours to the time of writing at $525 million.
Related: Who cares about $100K? 5 Things to know in Bitcoin this week
“See how nicely the levered longs were swept. Nothing left to liquidate on the long side,” Sina, co-founder of asset management firm 21st Capital, said on X.
“Now imagine what can happen if the price begins rising and takes out that $1.5B short liquidation level at $97K.”
Bitcoin exchange liquidation map (screenshot). Source: CoinGlass
Sina added that Bitcoin had a chance to launch another “assault” on $100,000 if funding rates were to stay at manageable levels.
On a cautionary note, Axel Adler Jr., a contributor to onchain analytics platform CryptoQuant, warned that overall leverage remained elevated despite the liquidation event.
“Despite the recent deleveraging, leverage levels remain high,” he said alongside CryptoQuant data.
“Key long positions were built around $93K, giving bears a chance to profit before the price approaches this level.”
Bitcoin adjusted estimated leverage ratio. Source: Axel Adler Jr./X
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.