Bitcoin Encounters First Support Level Amid Short-Term Decline

Bitcoin (BTC) is currently encountering its first significant support level following a short-term decline, according to data from CryptoQuant. This development coincides with notable liquidations in the market. It also provides valuable insights into the prevailing sentiment among traders.

Bitcoin is encountering its first support level following a short-term decline

“BTC returned to the initial long liquidation area of 58.25k and began to stabilize there.” – By @3AMRTAHA_

Full post 👇https://t.co/y7jrmWsEu8 pic.twitter.com/8b0tWtuBNW

— CryptoQuant.com (@cryptoquant_com) August 13, 2024

Bitcoin Stabilizes After Retesting $58,250 Liquidation Zone

The BTC Longs/Shorts Liquidated Delta is an indicator presented on CryptoQuant that denotes the disparity between liquidated long and short positions on Bitcoin. This metric gives important information of the market trend as to which side is more dominant, longs which mean the bearish side or shorts which represent the bullish side.

Analyzing data that have been prepared in the recent past provides several observations worth noting. Bitcoin has retested the start of the first long liquidation region, which is around the $58,250 mark where further stabilization occurred. This stabilization might point at the fact that the market is finding some support at this price level. It indicates that there are some traders who are waiting for this level to enter the market after the downward movement observed over the recent past.

Market Awaits Bitcoin’s Next Move as Funding Rates Turn Negative

Similarly, funding rates that calculate the cost of being long or short have risen to a slightly negative value, around -0. 00%. Negative funding rate means that retail traders are more willing to open short positions meaning that they think that Bitcoin price may well go lower.

These factors create a somewhat complex picture of the current state of the market. From one side, the consolidation around the $58,250 support level may indicate there is a base created for the recent sell-off. Nevertheless, the negative funding rate as well as the rise of interest in short positions means that many traders continue to look for a drop in the Bitcoin price.

While Bitcoin continues to fluctuate in this significant support level, players in the market will be looking out for signals of either a bounce back or further drop. The result of such a fine line between bullish and bearish forces will probably define Bitcoin’s price direction in the short term. The above observations are based on the data from CryptoQuant as of the last update.

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