Bitcoin (BTC<\/a>) stayed near two-month lows at the Aug. 18 Wall Street open as markets came to terms with extreme liquidations.<\/p>\n Data from Cointelegraph Markets Pro<\/a> and TradingView<\/a> showed BTC price action tracking sideways after a single daily candle spawned 8% losses.<\/p>\n The largest cryptocurrency saw a cascade of liquidations<\/a> across derivatives markets, with these accounting for an \u201coutsized\u201d majority amid relatively slack spot selling.<\/p>\n \u201cIn Deribit it is likely that a large account got wiped, considering the immense short liquidation that occured together,\u201d trading firm QCP Capital wrote in a market update sent to Telegram channel subscribers on the day.<\/p>\n QCP, like others, noted that the market reaction to the alleged trigger \u2014 a write-down of SpaceX\u2019s $373 million BTC holdings \u2014 appeared exaggerated<\/a>.<\/p>\n \u201cThis brought back the 2021 and 2022 ghosts of Elon-driven tops and bottoms, and we certainly hope the market will not revert back to those times again,\u201d it continued, referring to previous Bitcoin sales<\/a> and accompanying comments from Elon Musk, joint CEO of SpaceX and Tesla.<\/p>\n Total liquidations challenged those seen in the immediate aftermath of the FTX exchange meltdown \u2014 the event which resulted in BTC\/USD dipping to two-year lows of $15,600<\/a> in November 2022.<\/p>\n \u201cThis feels like yet another sign of the drying liquidity markets have seen over the last few weeks,\u201d financial commentary resource The Kobeissi Letter added<\/a> in part of its own reaction.<\/p>\n As BTC price drifted slowly toward $26,000, market participants diverged over the true nature of the situation and its future implications.<\/p>\n Related: <\/em><\/strong>How low can the Bitcoin price go?<\/em><\/strong><\/a><\/p>\n For popular trader and analyst Rekt Capital, the picture was bleak \u2014 a double top formation<\/a> for BTC\/USD in 2023, and a complete lack of support from trend lines and moving averages during the breakdown.<\/p>\n \u201cBTC formed its Higher High at ~$31000 on inclining volume. But price formed the second half of its Double Top on declining volume,\u201d he wrote<\/a> in part of multiple X posts.<\/p>\n An accompanying chart showed trading volume on daily timeframes, as Rekt Capital warned that capitulation had likely not yet matched previous sell-offs.<\/p>\n \u201cThough there was a small breakout in seller volume on this crash\u2026 It’s still nowhere near the Seller Exhaustion volume levels (green box) of previous BTC reversals (yellow circles),\u201d he explained.<\/p>\n \u201cIn fact, current Seller Volume would need to probably double to reach those Seller Exhaustion volume levels that prompted price reversals in early & late March as well as mid-June.\u201d<\/p><\/blockquote>\n Others were more optimistic, including trader CryptoCon, who identified key two completed tasks common to successful BTC price rebounds during bull market retracements.<\/p>\n These involved relative strength index (RSI) values bouncing at the 0.382 Fibonacci retracement level.<\/p>\n \u201cEvery cycle, the Weekly Bitcoin RSI experiences a fake out of the bull market start line, some lasting longer than others,\u201d he explained<\/a>.<\/p>\n \u201cAnd every one of them makes a revisit to the .382 Fibonacci retrace of the move. With the latest drop, both of those things are now complete.\u201d<\/p><\/blockquote>\n Rekt Capital noted that daily RSI was now at its most \u201coversold\u201d since June 2022, with only two episodes in Bitcoin\u2019s history, both in bear markets, beating it.<\/p>\n Looking ahead, QCP meanwhile flagged next week\u2019s commentary from Jerome Powell, Chair of the United States Federal Reserve, as the next potential source of volatility.<\/p>\n \u201cWe believe that a lot now rests on Powell’s speech at Jackson Hle next week,\u201d it concluded.<\/p>\n“Drying liquidity” costs BTC price key support<\/h2>\n
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Analyst: Spot sell volume still 50% below 2023 high<\/h2>\n
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