Bitcoin bobs around $39K as traders head for the hills liquidating $500M longs – what’s next?

YEREVAN (CoinChapter.com) – While traders liquidate $500 million worth of long crypto positions, Bitcoin (BTC) consolidated sideways at a rebound level that has been instrumental in preventing plunges in the asset’s value since Jan. 2021. As a result, the BTC/USD exchange rate stood at $39,030 in Wednesday’s New York session.

However, the technicals paint a gloomy picture for the flagship crypto. As CoinChapter reported in the previous Bitcoin review, the leading digital asset registered lowering trading volumes. In detail, lower trading volumes signify either growing disinterest among traders or the desire to hold rather than exchange.

Also read: MicroStrategy will offer its employees an option to invest in Bitcoin (BTC) for their 401K savings plan.

Bitcoin (BTC) technicals favor the bears.

However, other technicals, such as the relative strength index (RSI), pointed in the same direction. The oscillator dropped to 38, indicating low return expectations.

Moreover, the Mayer Multiple (MM) didn’t leave much hope for the Bitcoin bulls. Notably, traders utilize the indicator to determine the best entry points into the market and the potential exit points. In other words, the MM is a gauge of when to buy and when to sell.

As of Apr. 27, the MM continued to chart between 0 and 1, close to the 200-day moving average (yellow wave), lacking bullish momentum for a breakout. However, the MM has to bottom out before a surge at the same time. Thus, the bears can expect a plunge in BTC value before the charts favor the bulls.

Also read: Bitcoin paints chart signal that forecasts 50% dip, analyst asserts.

Additionally, traders’ alleged desire to allocate assets got on-chain confirmation, as $500 million worth of long positions on various crypto assets liquidated in a week.

Traders liquidate $500M crypto longs

According to the analytical platform CoinGlass, the long position liquidations clocked at $516 million in the previous week. Furthermore, Bitcoin accounted for $142 million, while Ethereum crossed $143 million. In detail, long position liquidations mean that traders sold them for cash, wishing to allocate their funds, hedging from the shaky crypto market.

However, as more traders liquidate, the sell-off wave becomes more forceful, subsequently dragging the price down. The vicious cycle also hit the stock market, as the latter dropped 7% in the previous week.

Also read: EU Lawmakers want Bitcoin (BTC) mining banned: Favor Ethereum (ETH) instead.

The panic sales, along with the bearish technicals, indicate further losses for the crypto market and for Bitcoin as well. As of publication, the BTC/USD price action held on to the support levels mentioned above, but the upcoming sessions will show if the forecast has merit.