Fun

Bitcoin no longer in ‘easy mode’ — Expect a leverage wipeout, observers warn

News Feed - 2024-04-12 01:04:00

Ciaran Lyons4 hours agoBitcoin no longer in ‘easy mode’ — Expect a leverage wipeout, observers warnSome crypto traders suggest waiting on the sidelines to avoid getting “rinsed by leverage,” as they can always “play catch up later.”7545 Total views33 Total sharesListen to article 0:00Markets NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksTraders with leveraged positions in Bitcoin (BTC) could be in for a nasty surprise as the cryptocurrency faces a critical crossroads, which could see the price bounce in different directions, analysts warn. 


“The market was in easy mode, but right now clearly there’s too much leverage and market makers are having a field day exploiting high emotions and degenerate behavior,” pseudonymous crypto trader Honeybadger said in an April 11 post on X.


“Market makers are having the best time ever chopping everyone up,” he added.


Data from CoinGlass shows that $39 million worth of leveraged positions in Bitcoin were liquidated over the past 24 hours, with a total of $18.38 million in long positions and $20.62 million in short positions.


Honeybadger pointed to the Bitcoin price chart, which appears to be forming a symmetrical triangle, indicating a neutral pattern, unlike a bullish ascending or bearish descending triangle, which traders can use to make better judgments of its direction.Annotated Bitcoin price chart showing the formation of a symmetrical triangle. Source: Honeybadger


He believes traders might prematurely interpret it as a “retest of the triangle,” prompting them to enter long positions with high confidence. He warns these traders could be caught off guard with a fakeout — when the price briefly moves out of a chart pattern but quickly retracts.


Mechanism Capital co-founder Andrew Kang is more optimistic, believing the upward trend will continue into new all-time highs following the Bitcoin halving on April 20.


“I expect BTC to touch $80K by May,” he said in an April 11 post on X.


Bitcoin is currently trading at $70,500, having tested its support level of $68,500 three times in the past week, per CoinMarketCap data.Bitcoin’s price has hovered between $66,100 and $72,520 over the past 7 days. Source: CoinMarketCap


On April 10, Bitcoin’s price briefly dropped 3% below the support level following the release of United States inflation data, which disappointed many observers.


Recently, the market witnessed a sudden 5% drawdown in the price of Bitcoin from $69,450 to $65,970 on April 2, which saw $50 million of Bitcoin long positions liquidated.Source: Ben Werkman


However, the increase in leveraged positions taken by traders over the past few days shows that another similar 5% drop will have a much greater impact on long positions.


If Bitcoin’s current price increases by 5% to $73,819, approximately $2.14 billion in short positions will be liquidated, as per CoinGlass data.


Gold proponent and Bitcoin critic Peter Schiff claims there are “way too many” people with long positions in Bitcoin with too much confidence that “they can’t lose.”


“Markets seldom work out the way speculators expect them to. More often than not they end up disappointed,” he stated in an April 11 post on X.


Related: Bitcoin 5% flash crash leads to $165M in leveraged crypto liquidations


On the other hand, if Bitcoin’s price drops by 5% to $66,671, roughly $1.63 billion worth of long positions will be liquidated.


Honeybadger stated that he’s staying on the market sidelines due to volatility and isn’t worried about missing out on price dips in the short term. Arthur Hayes recently echoed a similar sentiment, claiming that he has decided to “abstain from trading until May” amid a potential crypto “firesale.”


“My strategy is to wait for the right moment and not to rush it. And if I am wrong? Well at least I have protected my capital and I can play catch up later,” wrote Honeybadger.


Similarly, crypto trader Jelle advised his 78,500 X followers to sit on their hands and not “get chopped up” by getting “rinsed on leverage.”


Magazine:YouTuber declines ‘7 figure’ sponsorships after FTX scandal: Brian Jung, Hall of Flame


This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Bitcoin# Bitcoin Price# Adoption# Arthur Hayes# Halving# Bitcoin Halving# LiquidityAdd reaction

News Feed

Over 75% of Bitcoin short-term holders in profit as BTC breaches $67K
Zoltan Vardai10 hours agoOver 75% of Bitcoin short-term holders in profit as BTC breaches $67KBitcoin price is finally seeing some relief, but it faces significant resistance at the $68,000 mark, which would trigger over
Brayden Lindrea1 hour agoXRP jumps then dumps on faked BlackRock XRP trust filingXRP’s price surge was short-lived and has almost returned to its original price.1218 Total views4 Total sharesListen to article 0:00NewsJ
Amaka Nwaokocha11 hours agoCFTC charges residents of Florida, Louisiana, Arkansas for crypto fraudThe regulatory body asserts that the defendants managed to entice over 14,000 individuals by creating false weekly return
Frutti Dino’s FDT Token to Be Listed on Huobi Global and Gate․io
Frutti Dino’s FDT Token to Be Listed on Huobi Global and Gate․io sponsored Monoverse, a blockchain game developer, announced the simultaneous listing of FDT (Frutti Dino Token),
Dogecoin Is ‘Ready To Run Again’ – Analyst Expects 60% Rally
Este artículo también está disponible en español. Dogecoin has entered a consolidation phase, holding below its recent local high of $0.48. Despite showing signs of bulli
ONDO Exchange Inflows Grow – Volatility Ahead?
Este artículo también está disponible en español. Ondo Finance (ONDO) has emerged as a standout project in the crypto market, gaining significant attention for its focus
Dogecoin Bollinger Bands Tighten On 12H Chart Hinting At Imminent Price Move – Insights
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
4 Years After the 2017 Law Enforcement Takedown, Alphabay Is Once Again the King of Darknet Markets
4 Years After the 2017 Law Enforcement Takedown, Alphabay Is Once Again the King of Darknet Markets Following the demise of the largest darknet marketplace (DNM) in mid-July 2017,
Arijit Sarkar14 hours agoUK House of Lords passes bill to seize stolen cryptoDuring the bill’s review phase, the House of Lords agreed on certain amendments to clarify its intent of targeting monetary proceeds from fra
Jonathan DeYoung11 hours agoThe Agenda podcast predicts the future of crypto and talks adoptionOn Episode 20 of The Agenda, hosts Ray Salmond and Jonathan DeYoung interview each other about their blockchain journeys, the
Einstein Crypto Exchange Seized by Canadian Securities Regulator
Canadian securities regulators have seized control of the Einstein cryptocurrency exchange. The British Columbia Securities Commission (BCSC) announced Monday that it had filed to t
Overstock Shares Crash as Former CEO Cashes Out – Goes All In on Crypto and Gold
Ousted former CEO of Overstock, Patrick Byrne, revealed via a regulatory filing on Wednesday that he offloaded his entire holdings in the internet retailer he"s been at the helm for since 1999. Byrne liquidated his entir