A popular cryptocurrency trader took to social media platform X to predict that Bitcoin’s price could soon drop further to $63,000. This forecast is based on the liquidity dynamics that have influenced the price of the flagship cryptocurrency over the past few weeks.
Bitcoin market structure suggests greater volatility in the future
In a post from April 4 on the X KillaXBT platform revealed possible trajectories that the Bitcoin price may follow in the coming weeks. Crypto trader analysis is based on BTC’s current technical structure, citing the multiple support and resistance levels evident on its weekly time frame.
The analyst explained that over the past few weeks, investors have seen multiple swings between outer highs and inner lows. More specifically, the sequence appears to have started around four weeks ago with a wave of outward highs, which in turn caused a rapid reversal in Bitcoin’s price – ultimately leading to a bearish weekly close.
KillaXBT explained that with this move, Bitcoin had to find its balance again; this drove the flagship cryptocurrency’s weekly candle back to the $71,500 level. Interestingly, this move had the express intention of sweeping up behind schedule brief positions before prices reversed down again – a move that KillaXBT pointed out as a classic liquidity hunt seen before a reversal.
As the previous week’s candle ended lower, the cryptocurrency expert highlighted another noteworthy event; this week also saw some fluidity (another rebalancing event). What followed this attack was clearly another downward rejection of the BTC price.
However, since Bitcoin’s recovery is mainly driven by leveraged positions and the market structure is already bearish, KillaXBT suggests that the available buying pressure may soon be exhausted. As such, the $64,900 lows appear vulnerable to another such liquidity spike.
The technical analyst also sees Bitcoin breaking the external lows at $63,000 in the medium term. On the other hand, the market analyst emphasized that this downward trend is consistent with expectations of an immediate reversal towards $72,800, where another selling move awaits.
Short-term holder activity supports short-term bearish sentiment
In another post on X, network analyst Joao Wedson common that there has been a noticeable shift in behavior among short-term Bitcoin market participants, with data suggesting this cohort is increasingly shedding their holdings. The relevant indicator here is the metric of the short-term change in the holder’s net position.
This cohort of investors typically includes investors who have held Bitcoin for less than 155 days. As such, they are often more responsive to sudden changes in price action, unlike more experienced market participants.
Consequently, the activity of these up-to-date holders may actually reveal a change in sentiment (in this case, bearish). When this happens (impulsive selling), Bitcoin’s price often heads south as this selling contributes to bear pressure.
So the world’s leading cryptocurrency could actually be heading towards $63,000 in the near future, at least before there are any real attempts to regain value. At the time of writing, Bitcoin is trading at around $67,256, reflecting an enhance of 0.5% over the last day.
Featured image from iStock, chart from TradingView
