Over $17 Million USD In Bitcoin Contracts Liquidated, Is A Selloff To $9,000 On The Cards?

Over $17 million USD in Bitcoin liquidated over the past 24 hours as BTC plummets to $9,500 USD, is a selloff on the cards?

2020 started off very bullish across the crypto market as the top coins gained handsome double digit gains as Bitcoin (BTC), the top cryptocurrency, gained 33% in this period. However, in the past 24 hours the market faced a bearish reversal setting BTC’s price aback to $9,556 as at time of writing from levels above $10,000 at the start of the month.

The price of Bitcoin (BTC) took a substantial hit as bears pushed it below the $9,500 USD wiping off over $17 million in BTC contracts on BitMEX and a further 100+ BTC contracts on Bitfinex in 12 hours – the second highest no. of liquidations in the past fortnight.

Despite the market still showing signals of a possible continuation of a bull run, the fundamentals are slowly turning bearish. The market experiencing a Long Squeeze, a phenomenon that sees traders close their highly leveraged funded positions and sell the base asset.

While the $19 million USD liquidation may not be enough to influence a major move in the market, a bearish reversal signal can be derived from the liquidations. A long squeeze adds more pressure on BTC’s selling market and the short test below the $9,500 USD mark may further confirm a possible move towards the $9,000 USD mark.

BTC/USD turns bearish as $9,000 lingers

A look at the daily charts signals a bearish move in the near term. The price trades below the 20-day Bollinger Band middle line, turning the key support levels to key near term resistance. A breach below minor support levels at $9,467 USD will be a death move for the pioneer cryptocurrency, as bears take up positions in the market. Daily trading volumes spiking during a downtrend further signals the trend is set to continue.

Bulls should be on hand to prevent a breach below the $9,350 near term support levels, to prevent a slide to lower support levels at $9,200, $9,070 and sub-$9,000 levels.