BTC: Middle East Crisis vs. Historical High
Date: 2023-10-12 Author: Dima Zakharov Categories: BLOCKCHAIN, CRYPTO PAYMENTS
BTC Under Pressure Despite CZ's Optimistic Forecast
Binance, one of the leading cryptocurrency exchanges, has prominently displayed a countdown to Bitcoin's next halving event on its website. CZ has emphasized the historical pattern of Bitcoin achieving new all-time highs following each of the past three halvings, which occurred in 2012, 2016, and 2020.
However, recent trends in the derivatives market paint a bearish picture in the short term. According to Coinglass data, BTC bulls suffered losses totaling $25 million for six consecutive days.
BTC Liquidation Map. Source: Coinglass
The liquidation map represents an overview of aggregate positions in the cryptocurrency derivatives market that were liquidated or closed within a specific period.
BTC has been the hardest hit, with long positions in BTC worth over $25.5 million being liquidated in just one day. The 2% drop in the global cryptocurrency market capitalization suggests that investors are exiting the game.
With the current situation persisting, BTC's spot price could potentially drop towards $25,000 in the coming days.
Bitcoin Bears Take Control of the Market
Bitcoin started the month with several attempts to surpass the crucial $28,000 mark. Bitcoin Dominance (BTC.D), an index measuring Bitcoin's dominance in the cryptocurrency market, reached a four-month high at 51%.
However, derivatives market data indicate that the Israeli-Palestinian crisis has tilted the scales in favor of the bears. Between October 7th and 11th, long BTC positions suffered heavier losses compared to short traders, with over $55 million in long positions being liquidated during this period.
Total BTC Liquidations. Source: Coinglass
The metric of total liquidations assesses the total value of closed long positions versus short positions over a specific time interval. As seen in the graph above, bears have dominated for five consecutive trading days since the geopolitical crisis between Israel and Palestine erupted.
It remains uncertain whether traders holding long positions with significant leverage below current prices will exert buying pressure to prevent further price declines.
BTC Forecast: Loss of $25,000 Level Could Lead to More Serious Losses
In the coming days, BTC's price may approach the $25,000 mark. However, data from In/Out of Money Around Price (IOMAP), which shows the distribution of current holders' purchase prices, offers a less pessimistic outlook.
According to IntoTheBlock's IOMAP position statistics, a key cluster of holders acquired coins around the $26,300 level.
As seen below, 1.95 million addresses bought 811,310 BTC at the maximum price of $26,695. If they continue to hold, they may avoid further losses.
However, if the bears break through this support level, the price could swiftly drop to the $25,000 mark.
BTC and GIOM Data. Source: IntoTheBlock
On the other hand, if the bulls manage to reclaim the $30,000 mark, they could regain control. In this scenario, 2.5 million addresses that purchased 1.06 million BTC at an average price of $28,300 could trigger an instant bearish reversal if they decide to take profits prematurely.
If this resistance does not hold, the next stop could be the psychological resistance level at $30,000.
