Bitcoin (BTC) has dealt vital ache to bulls in current weeks, and now, contemporary information exhibits simply how a lot.
In a tweet on Jan. 10, on-chain analytics agency Glassnode revealed that these longing BTC had suffered a rerun of final May, when BTC/USD started to fall towards $30,000.
Long merchants fail to “catch the knife”
According to Glassnode’s Longs Liquidations Dominance metric, the “majority” of liquidations over the brand new yr concerned longs.
This is unsurprising, given Bitcoin’s general trajectory since late November, however the extent of losses places the previous few weeks on par with May when it comes to longs vs. shorts.
“Bitcoin long liquidation dominance has hit 69%, the highest level since the May 2021 deleveraging event,” researchers commented.
“This means that the majority of liquidations in futures markets over recent weeks were long traders attempting to catch the knife.”Bitcoin futures lengthy liquidations dominance annotated chart. Source: Glassnode/Twitter
Looking on the information, the interval from late July by late November noticed the alternative development kind, with shorters turning into victims of an sudden bull run a number of occasions.
While lengthy liquidation spikes don’t at all times mark native worth bottoms, the urge for food for a turnaround on quick timeframes has lengthy been vocal.
Related: ‘Most bullish macro backdrop in 75 years’ — 5 issues to observe in Bitcoin this week
Bitcoin, as Cointelegraph reported, is firmly “oversold” by historic requirements at present costs.
“If we bounce here, I’m not convinced we won’t revisit these prices, but some short-term relief would be nice,” quant analyst Benjamin Cowen tweeted Saturday as a part of intraday observations.
“Daily RSI is also technically oversold, $40k-$42k is theoretically a support area too.”
Cowen was commenting on the Crypto Fear & Greed Index, which hit uncommon lows of simply 10/100 over the weekend, signifying “extreme fear” amongst market contributors.
Since bottoming out within the depths of 2018 despair, $BTC has solely seen this oversold indicators solely 4 occasions at 3k, 10k, 4k, and 30k. Not lengthy after these information have been achieved, #Bitcoin rallied 340%, 17%, 1585%, 141% accordingly. Full particulars: https://t.co/qtlKY9tQzS pic.twitter.com/oSpb3fTjKX
— CRYPTO₿IRB (@crypto_birb) January 8, 2022
Such occurrences are usually adopted by a worth and sentiment restoration, however present lows are poignant, as the identical worth degree one yr in the past was accompanied by the alternative phenomenon — 93/100 or “extreme greed.”