Bitcoin (BTC) price analysis: BitMEX long liquidation may be behind BTC/USD collapse
|- A critical resistance of $10,000 is still out of reach.
- A massive long position liquidated on BitMEX, might have caused the strong bearish move on the spot market.
Bitcoin (BTC) managed to recover from the recent low of $9,112 touched during a sharp sell-off on Sunday. BTC/USD is changing hands at $9,643, having gained about 1.6% on a day-on-day basis. Despite the recovery, the first digital coin is still significantly lower on a week-on-week basis (-9%).
Meanwhile, some experts believe that BitMEX might be behind Bitcoin's Sunday collapse. As the stats data shows, the sell-off coincided with the liquidation of a massive long position worth of $100 million on BitMEX. As BitMEX supports trading with 1X100 leverage, the effect of the sell-off was multiplied accordingly.
The industry experts have already noticed that the trading platform developments influence Bitcoin price movements.
"Bitcoin down as @BitMEXResearch unwinds highly leveraged positions. When I interviewed CryptoHayes he said the avg. leverage (on a scale of 0-100x) was 20. Extrapolating that number, adding recent outflow data, and you get a (temporary) inferred BTC price of $8,800 - $9,300," Max Keiser noted recently in his Twitter.
Bitcoin's technical picture
Meanwhile, BTC/USD recovery is capped by $9,750. This barrier is strengthened by SMA100 (Simple Moving Average) 1-hour. Once it is out of the way, the upside is likely to gain traction with the next focus on psychological $10,000 with SMA200 1-hour located on approach.
On the downside, a sustainable move below $9,500 (SMA50 1-hour, the middle line of 1-hour Bollinger Band will push the price towards the initial support of $9,400(the lower edge of 1-hour Bollinger Band) and towards the recent low of $9,112.
BTC/USD, 1-hour chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.