What is happening to the bitcoin price? The CEO of Trading Different, Iván Paz, shared his vision about the price of BTC and what could happen.
Iván Paz, expressed: “After having a start to the year with a strong recovery in the bitcoin price, exceeding 30,000 USD, the market began to capitalize on the gains and generate resistance zones where the supply began to appear.”
And he added: “The bullish momentum had a very strong fuel to be able to rise. It was not only the entry of the demand, but also all the liquidity that was formed when the price was below 20,000”.
To better understand this, he stated that it is necessary to clarify that there are two types of liquidity in the market:
– That which is reflected in the Order Book, which would be Buy or Sell orders that have not yet entered the market.
– And those liquidity that have already entered the market, but are reflected as Settlement Points and Stop Loss. This type of liquidity can be observed with the Liquidation Pools (graph 1).
(figure 1)
“Liquidations Pools are price zones, which indicate through a mathematical algorithm, where all traders who enter the market over-leveraged could lose. This algorithm, developed by the Trading Different team, shows us where the price would be most likely to go, forced by high-frequency bots. These high-frequency bots take advantage of market failures, force the price in one direction, and use Stop Loss zones and Liquidation Points to be able to close their high-volume winning positions,” he detailed.
Reversal in the price of bitcoin
According to Iván Paz, we are currently seeing a setback in the bitcoin price, but he remarked: “You have to be alert, because the chances of the price continuing to fall breaking the USD 25,000 level are very high. The Liquidation Pools algorithm offers us the possibility of knowing, with an approximate effectiveness of 70%, how far the price can go to finish liquidating the positions”.
Then he added: “In this case, while the price is falling, it is liquidating all the long positions that are over-leveraged in the market. If we focus on over-leveraged traders, that is, with 100x, 50x, 25x and 10x leverage, we can see in graph 2 that the price could even fall below 24,000”.
(graph 2)
“Therefore, this information would serve to operate with caution and find better points for our orders,” he concluded.
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