Key Insights:
- Bitcoin short traders suffered a massive liquidation in one hour amid price shift.
- The BTC liquidation imbalance between short and long traders comes as the coin reclaimed the $111,000 mark.
- Analysts predicted bearish sentiments for ETH in the short term.
Bitcoin (BTC) price has triggered an abnormal liquidation imbalance over the past hour. This shakeout happened as Bitcoin reclaimed the $111,000, after an extended struggle at the $110,000 levels.
Surprisingly, an analyst predicted a near-term pullback in the price of Ethereum (ETH). In the long term, the analyst sees ETH decoupling from BTC.
Bitcoin Liquidation Imbalance Trend
According to CoinGlass data, the Bitcoin derivatives market was hit by $12.29 million worth of liquidations within the past hour.
What is most intriguing is the liquidation imbalance between long and short traders. Per the CoinGlass data, about $616,410 in longs were squeezed out compared to $13.22 million in shorts. This has created a liquidation imbalance of 2,045% within the past hour.
For context, liquidations occur when traders use leverage to bet on price movements. If the market moves against them, exchanges automatically close positions to prevent further losses.
Thus, a high ratio of short-to-long liquidations on the hourly liquidation chart implies longs were liquidated at a much higher rate. A similar event occurred earlier in May, with $179.34 million from short positions and $46.34 million from longs.
In contrast, if shorts surpass longs, the reverse applies, indicating that one side of the market is over-leveraged.
Based on the latest liquidation trend, short traders used excessive leverage, making them vulnerable to even small price spikes.
This is bullish in the short term for Bitcoin, as it clears out weak hands and reduces selling pressure. It also aligns with the resilience of BTC to holding above key supports at $108,000.
Meanwhile, the 24-hour liquidations have exceeded $457 million, with ETH leading at approximately $151 million.
BTC price Rebounds above $111K
The price of Bitcoin recently dropped below $110,000 amid broader market weakness in August.
However, the leading coin has reclaimed $111,000 as buyers resumed the market, supported by institutional accumulation.
As of this writing, BTC price was changing hands at $111,334, representing a 1.98% increase in the last 24 hours. BTC soared to an intraday peak of $111,653 before experiencing a slight decline.
The trading volume also spiked moderately by 19.15% to $73.53 billion in the last 24 hours. This suggests that investors are excited by the increased price performance in the Bitcoin ecosystem.
Notably, the Bitcoin price reversal to $111,000 likely triggered the liquidation balance. As BTC bounced back, it triggered stop-losses on longs positioned for further downside, while shorts covered positions, amplifying the uptrend.
Where is ETH Price Heading?
While Bitcoin has shown signs of recovery, ETH, the leading market altcoin, saw its price fall on the daily and weekly charts.
At press time, ETH price has plunged 1.42% over the previous day to $4,315, with a market cap of $518 billion.
Analyst Benjamin Cowen has further predicted a near-term pullback for ETH. Cowen predicted that ETH price will drop below its 21-week Exponential Moving Average (21W EMA) within the next four to six weeks.
The analyst sees ETH decoupling from BTC due to its underperformance on the ETH/BTC chart. Cowen noted that ETH will retrace to the 21W EMA before rallying, independent of BTC.
After Ethereum hits the 21-week EMA, Cowen expects the Ethereum price to hit a new all-time high.
The 21W EMA often sets the pace for price rallies if it holds as support. A drop to this level could shake out weak holders, allowing stronger buyers to enter.
Additionally, market catalysts like increased whale accumulation or broader crypto market bullishness could fuel the ETH rally.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
