While raced towards a new all-time high to kickstart , I warned that the presence of large sell walls resting above $125,000 region would make it a nearly insurmountable mountain to climb, without price first retesting below the $117,000 region.
Just to let you know, caution and patience was necessary as prices made yet another short lived deviation above the $120,000 region.
Those who did not heed this warning found themselves on the wrong end of a freight train come Friday afternoon as one of the largest single-day liquidation events in crypto history kicked off.
Those in the Highstrike trading room were able to avoid catastrophe as we took some shorts on BTC during Tuesday’s lower high above $124,000 just before the chaos kicked off.
As we see below, you’d have to go all the way back to the June 2022 bear market, when post-Luna / pre-FTX bankruptcy contagions started to kick off, to find another comparable day of long liquidations.
It was a punishing day for the overleveraged and impatient, but ultimately a healthy market rinse in the broader scheme of things.
As we can see in the orderbook data below, those big blocks of buy orders we mentioned last week, below $117,000, were filled.
On aggregate, over $10 billion was bought following Friday’s crash, which represents a dramatic change of hands for BTC, from the overleveraged and fragile holders, to institutional players who are buying to hold for longer periods of time.
This is exactly the set-up and deep rinsing that could pave the way for higher highs into the end of the year.
From here, we will be looking to see if the ETFs can find any renewed buying interest in the weeks to come as the market chugs around and searches for a bottom.
Since last week, those flows have cooled considerably, and until we start to see multi-billion dollar days of inflows stack up again, the risk on BTC will remain neutral to down as we head into the second half of October.
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