After three consecutive days of rally, Bitcoin and ETH came under heavy downward pressure again as ETH neared recent lows of $ 1,700. As for Bitcoin, the asset is hovering just above $ 30,000 at press time as the industry faces fears of new lows. While the market is gradually turning into a long-term downtrend, the direction is still undetermined in the short term.

To identify potential areas of decline or future recovery, we need to look at an active liquidation map to understand a trader’s current expectations.

swimming pool Liquidation in a higher area for Bitcoin, ETH?

Although bears have the upper hand at the moment, Bitcoin and ETH prices are still in a range and this could be a potential low before it rises again. While the potential is now dwindling day by day, the data shows that there is more liquidity at higher prices.

The importance of liquidity at such times is significant as price movements follow pools of capital. Therefore, when orders are placed in an up or down direction, the price will approach this value over time, and as the price approaches these pools of capital, traders will often add more margin or liquidate their positions.

ETH / USDT liquidation chart | source: Twitter

BTC liquidation chart | source: Twitter

Analyzing the Bitcoin and ETH charts, it can be seen that ETH has a strong capital pool of USD 2,200. Similarly, there is also a strong liquidity zone between $ 1,700 and $ 1,800 – where the price is trading at the time of writing. Hence, ETH is likely to reverse the range as price action is pulled towards liquidity.

Also with Bitcoin the enormous liquidity is between 36,000 USD and 39,000 USD with 1.3k Bitcoin.

Twitter user “The King Fisher” tweeted:

“BTC Liquidations: Take long liquidations at a high of $ 33,000 and then do short liquidations at $ 38,3,000 to $ 1,3,000 (y-axis, relative strength), pretty high!”

Will the price go up again?

At the time of writing, the 3-month premium for Bitcoin futures at Binance and Deribit has been rolled back sharply, meaning the spread between spot and futures has decreased. Therefore, the spreads have been lower in the last few days without any major downward movement, so further price movements are possible.

BTC / USDT and weekly candle above the demand zone | Source: Tradingview

Bitcoin is currently playing with fire, however, as the weekly candle is just above the demand zone. The support range of $ 28,130 to $ 30,130 has been maintained since early 2021. If this level is not maintained next week it will be like a sluice gate and bulls will be slaughtered under bearish pressure.

Right now, it is imperative for Bitcoin to close the weekly candle above $ 30,130 for the next 24 hours, and the next candle shouldn’t retest the above demand zone. The market could become active again at the beginning of the third quarter of 2021, but time is running out and the market has to react quickly.

You can see the BTC price here.

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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