In a significant turn of events, Bitcoin (BTC) has experienced its highest level of long liquidations in over a year, raising concerns about the stability of bullish momentum in the crypto market. Following a sharp decline that saw BTC drop to $111,800 before recovering to around $112,700, data from CoinGlass revealed that traders faced over $1.62 billion in long liquidations within just 24 hours, marking a substantial blow to bullish positions.
This spike in liquidations indicates that many traders are reconsidering their positions, as the market shows signs of weakening despite some analysts holding a more optimistic outlook. Historical data suggests that October has historically been a good month for Bitcoin, with the cryptocurrency rising 10 out of 12 years during this period since 2013. The only exception occurred in 2018. Should this trend continue, there is potential for BTC to reach new all-time highs as the month progresses.
Adding to the market’s dynamics, a potential policy shift by the US Federal Reserve is stirring discussions among economists. Timothy Peterson noted to Cointelegraph that the markets may be underestimating the likelihood of rapid rate cuts, which could provide a significant boost to Bitcoin and altcoins in the coming months. As market participants await this shift, it raises questions about whether major cryptocurrencies can maintain their support levels amidst ongoing volatility.
In the broader market landscape, several altcoins are facing challenges as they attempt to hold their support levels. Liquidation events have pressured these digital assets as they grapple with intensified selling pressure during rallies. Market analysts are closely monitoring developments to determine if altcoins can recover alongside Bitcoin.
The wider equity market is also experiencing notable movements. The S&P 500 Index (SPX) reached a new all-time high, bolstered by continued bullish activity. Analysts predict that if the index can maintain its ascent beyond the 6,700 mark, it may encounter resistance, with potential support emerging at the 20-day exponential moving average (6,550).
Meanwhile, the US Dollar Index (DXY) has rebounded off critical support at 96.37, raising hopes for a potential recovery. Sellers are expected to mount challenges around the moving averages, which could indicate the strength of the bullish defense at this level. A failure to maintain support could trigger a deeper downward trend for the DXY, extending to the 95 level.
On a technical level, Bitcoin’s ability to reclaim its strength will hinge on its performance around the $117,500 resistance. Analysts suggest that a rally past this threshold could pave the way for BTC to target prices as high as $141,948. However, a drop below the critical support level of $107,000 could lead to a significant decline, potentially toward $100,000.
In terms of Ethereum (ETH), the cryptocurrency has faced downward pressure below its support line, further compounding market concerns. The ETH/USDT pair is currently testing the $4,060 level, which may attract buying interest from bulls. A rally, however, could face obstacles around the 20-day EMA ($4,442), with risks increasing for declines below pivotal support levels.
As it stands, the cryptocurrency landscape remains tumultuous, with fluctuating sentiments and liquidations significantly shaping market dynamics. Investors are urged to navigate this uncertainty with caution as they assess the evolving landscape of Bitcoin and altcoins.
