The heatmap of position liquidations on "CoinGlass" also indicated widespread liquidations in major cryptocurrencies. At the time of writing, over the past hour Ethereum recorded the largest amount of liquidated positions with about $158.62 million, and Bitcoin ranked next with about $118.73 million.
Long positions in other altcoins including Ripple, Dogecoin, Binance Coin and Sui (SUI) were also liquidated, and this trend widened volatility in the crypto market. A long position is a trade in which the investor expects the asset price to rise. In leveraged trading, if the price falls below a specified level, the position may be forcibly liquidated. Concentration of liquidations in a short time frame can lead to a cascading exit from positions and expand the range of price volatility.
Earlier on Tuesday Bitcoin fell below $84,000 and entered the $83,000 range. Major cryptocurrencies including Ethereum, Ripple and Solana were also on a downward path.
Short-term outlook: Negative
The short-term outlook for Bitcoin is negative with a confidence level of 66 percent. The 20-minute drop in Bitcoin and the liquidation of $400 million in long positions are expected to trigger a cascade of stop-loss orders and increase short-term selling pressure.
The bearish state of Bitcoin's MACD indicator and the concentration of long positions among large traders also align with a likely increase in volatility. If Bitcoin returns to $84,000, it may retest $86,500, but if it fails to recover, the price is expected to fall below $83,000 and open the path down to $81,000.
Mid-term outlook: Neutral
The mid-term outlook for Bitcoin is neutral with a confidence level of 55 percent. Since Bitcoin's sharp drop reflects a correction of an overheated leveraged market, both the possibility of a mid-term trend change and the possibility of the correction ending remain on the table.
Bitcoin's Relative Strength Index (RSI) stands at 56.8 and the price is trading above the 20-day moving average (MA20); therefore, there is no sign of a complete collapse. However, negative funding rates and rising U.S. dollar index and interest rates continue to exert downward pressure on the market.
If Bitcoin holds the $83,000 support level, the price is expected to rise to $88,000. Conversely, losing this level could push the price below $81,000 and re-enter the $79,000 range.
Long-term outlook: Positive
According to a BloombergBit report, the long-term outlook for Bitcoin is positive with a confidence level of 52 percent. The recent sharp drop is expected to cause short-term shock in the market, but in the long term and after the removal of excessive leverage, it may become a factor for market readjustment centered on spot trading.
Given that Bitcoin's price remains above the 50-day and 200-day moving averages, its long-term uptrend remains intact. If Bitcoin maintains the $81,000–$83,000 support range, it could be on track to return to $90,000, but if that support is lost, a downtrend is expected and the price could reach the $76,000 range. / ISNA