Key Points
- Bitcoin traders are pushing for a price increase as liquidity sets up new challenges for the bulls.
- Bitcoin has liquidated a significant portion of longs this week, with a sudden retracement eliminating hundreds of millions of dollars in positions.
Bitcoin (BTC) traders are pushing for a price increase as liquidity prepares for new challenges for the bulls. Data from CoinGlass, a monitoring resource, shows bid liquidity moving closer to the active trading range above $60,000 on April 17.
Bitcoin Price Liquidity Increases Near Key Support
This week, Bitcoin has liquidated a significant portion of longs. A sudden retracement eliminated hundreds of millions of dollars in positions. However, bulls have not yet redressed the balance. BTC/USD is stuck around $63,000 and still threatens a fresh breakdown.
The most recent order book data indicates that bids are currently attempting to get filled just below spot price. This is a common practice aiming to draw the market lower. Keith Alan, co-founder of trading resource Material Indicators, suggests this is ultimately cathartic for a market in need of an upside bounce. He states that historically, taking bids has preceded a run into overhead resistance.
Bitcoin Funding Rates Temporarily Turn Negative
Trader sentiment is reflected by a return to negative funding rates for the first time since October 2023. This is a significant change from recent weeks, particularly the period around March’s all-time highs. Funding is now back to circling bearish sentiment, with shorts paying longs.
Daan Crypto Trades, a popular trader, notes that the past 6 months’ funding rate heatmap shows how March was generally overheated compared to the rest. He explains that this is normal when prices are trading near new all-time highs but can also result in the occasional flush of leverage.
Trading suite DecenTrader noted that the negative funding period, although short-lived, indicated an overall cooling environment. It concluded that “funding rates are back positive again but it was a sign that derivatives trading exuberance is calming down.”