Bitcoin is consolidating, fighting for gains and watching the price action on the daily chart. Even with the rejection of lower prices, the coin has yet to break out, decisively reversing the losses from June 24.
Should Bitcoin Traders Prepare for More Losses?
In light of this, an X analyst he thinks There could be more losses in the coming days. Posting on X, the on-chain analyst highlighted a worrying trend: even amid the Bitcoin trading community’s optimism, sellers are relentlessly piling on more short orders.
According to the Bitcoin Net Taker Oscillator indicator, the reading is -1.5%. At this level, it is at the same point seen when prices soared to $70,000 in November 2021 before falling sharply throughout 2022.
Bitcoin is trending toward a near all-time high, about 20% from the $73,800 printed in mid-March 2024. While the Q1 2024 uptrend defines the current formation, prices are retesting key support levels stacked between $56,500 and $60,000.
If there are deeper losses, as the analyst projects, BTC could break, reaching US$50,000. This development would automatically disqualify the short-squeeze narrative in some sectors.
Related Reading
To compound the bearish pressure, the analyst also chosen a spike in long liquidations, rising to 13% on June 27. The spike in long liquidations means that leveraged traders on major exchanges such as Binance and OKX now they are leaving at a loss.
The analyst added that what is happening regarding the sell-off is similar to what happened during the 2019-2020 correction. Then, more long-term traders were liquidated, and in five months, BTC fell by 46%.
If the past is any guide, then it is likely that the same could happen in the coming months. However, the analyst notes that if whales buy more than 500,000 BTC, prices will stabilize and then skyrocket.
Bearish Sentiment Rising: Time to Buy Bitcoin?
Health data also reinforces this bearish narrative. In recent weeks, the number of users and traders expecting BTC to rise has plummeted on various social media platforms.
It is worth noting that bearish sentiment has been building since Bitcoin’s halving event and the sideways price movement since April 2024. Although traders were bullish ahead of the halving event on April 20, the price’s failure to break above $74,000 has eroded confidence.
Even so, the current bearish sentiment could be a contrarian indicator, especially considering the bulls’ overall resilience. Prices remain above $60,000, rejecting attempts at lower lows.
Related Reading
Declining trader and investor confidence often accompanies funds, a situation seen at the end of June. Aggressive traders may see this as a carry opportunity, believing that BTC is undervalued at spot rates.
DALLE Featured Image, Chart from TradingView