Bitcoin could face a "liquidation cascade" towards $50,000, analysts warn, as the recent BTC price rebound appears to be losing momentum.
In his latest market commentary on X, popular trader Credible Crypto provided a pessimistic short-term outlook for Bitcoin bulls.
BTC Price Analysis Suggests Possible Return to "Range Lows"
Despite being up approximately 40% from its August swing low, Bitcoin's price action is struggling to maintain its recent gains. Data from TradingView shows BTC/USD experiencing a 1% loss on August 27, dipping from local highs of $65,100 on Bitstamp the previous day.
For market participants, the outlook seems bleak. Some argue that buyers are not positioned well to support a continued short-term uptrend. "Binance wants blood," Credible Crypto told his X followers.
He further elaborated,
"Since our local top, Coinbase spot takers have actually begun buying again, but Binance spot takers are selling twice as much. Open interest (OI) remains quite high, with lots of liquidity below."
Credible Crypto highlighted the significant selling volume in Binance's spot market and the open interest on Binance's Bitcoin futures market. He concluded with,
"If Binance sellers maintain the sell pressure, it could trigger a liquidation cascade back down to our range lows. The question now is simply how long it will take to occur."
Fellow trader Crypto Chase also expressed skepticism regarding the potential for a continued upward move. In his latest trading strategy update to X followers, he suggested the possibility of Bitcoin dropping below the $60,000 mark. He summarized,
"If we lose 59K cleanly, I think we head back towards the mid-50K’s, if not lower."
However, he acknowledged that the situation could still favor the bulls, with late bids in that range potentially going unfilled.
Bitcoin ETF Inflows Bolster Bullish Sentiment
From a macroeconomic perspective, the focus remains on the potential of the Bitcoin and cryptocurrency markets to outperform the broader risk-asset recovery.
Trading firm QCP Capital, in its latest bulletin to its Telegram channel subscribers, pointed to continued strong inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) as a positive sign for the overall market health. "BTC spot ETFs have seen strong inflows for 12 consecutive days, while ETH spot ETFs have faced outflows for 8 days," the bulletin noted.
"BTC's dominance in the options market reflects the macro-driven nature of the current rate-cut regime."
The prospect of U.S. financial policy easing, particularly through interest rate cuts, could present favorable conditions for crypto bulls in the near future.
