Bitcoin has been causing the bulls significant pain over the past few weeks, and new data shows the extent of the damage is even greater.

In a January 10 tweet, on-chain analytics firm Glassnode Disclosure BTC longs are following in the footsteps of last May when the price began to drop to $ 30,000.

Are traders long? can “Beginning falling knife”

According to Glassnode’s Long Liquidation Dominance Index, “the vast majority” of new year liquidations are long positions.

This is not surprising given the overall performance of Bitcoin since late November, but the magnitude of the losses between longs and shorts in recent weeks is at the level of May.

“The dominance of the Bitcoin long liquidation has reached 69%, the highest level since the event to remove the leverage in May 2021.

This means that most of the liquidations on the futures market in the past few weeks have been caused by long traders trying to catch falling knives. ”

Dominance rate in the liquidation of long positions Futures contract Bitcoin | Source: Glassnode

When looking at the data, the period from the end of July to the end of November showed the opposite trend, with the shorter, multiple unexpected price increases falling victim.

The square meterunusually low chest

While an increase in long liquidations does not always mark a local low, the need for a reversal in short time frames is well known.

In historical comparison to current prices, Bitcoin is definitely “oversold”.

“If BTC bounces off here I believe it will return at these prices, but some short-term slumps would be nice. The daily RSI is also technically oversold, with $ 40,000 to $ 42,000 theoretically support, ”said quantum analyst Benjamin Cowen. tweets on Saturday.

Cowen commented index Fear and greed for cryptocurrencies. The index hit a rare low of just 10/100 at the end of the week, indicating the “extreme fear” sentiment among market participants.

Since bottoming out in the depths of the 2018 Depression, $ BTC has only seen these oversold indicators four times at 3k, 10k, 4k and 30k. Not long after these records were hit #Bitcoin increased by 340%, 17%, 1585%, 141%, respectively. All the details: https://t.co/qtlKY9tQzS pic.twitter.com/oSpb3fTjKX

– CRYPTO₿IRB (@crypto_birb) January 8, 2022

“Since the bottom of the recession in 2018, BTC has only seen these oversold indicators 4 times on level $ 3,000, $ 10,000, $ 4,000 and $ 30,000. Not long after hitting these records, Bitcoin is up 340%, 17%, 1585% and 141%, respectively.

Such events tend to lead to price rallies and sentiment, but the current low is traumatic as the price was similar to a year ago but there was an opposite sentiment back then – 93/100 or “extreme greed”.

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