The last time the asset plummeted below the $23,000 territory was nine days ago.
The Bitcoin derivatives scene has witnessed an estimated $31 million in long liquidations in the past 2 hours following a sharp 3% price drop in the latest market-wide correction. Amid this bearish condition, analysts forecast a possible decline below $23,000.
On-Chain College, a CryptoQuant verified author, highlighted the recent bloodbath within the BTC derivatives market.
~$31 million in #Bitcoin Long Liquidations in 2 hours pic.twitter.com/GIXEhDyiCb
— On-Chain College (@OnChainCollege) February 24, 2023
Additionally, data from Coinglass reveals total liquidations to the tune of $44.3 million in the past 4 hours, with long positions making up over 90% of liquidated positions. Moreover, CryptoQuant data suggest a dominance of long liquidations, as 34 million longs have gone rekt in the past 24 hours, as opposed to 5.3 million liquidated shorts.
Chinese blockchain reporter Colin Wu highlighted that Bitcoin options contracts worth $1.8 billion expired at 16:00 (UTC+8) today. Open Interest had also reached 309K positions, marking the second-highest value in history, with the only higher figure recorded on November 11, 2022.
Open Interest refers to the total number of outstanding contracts or positions open in the market, calculated by adding all the long and short positions.
Furthermore, metrics revealed a significant pain point at $22,000, which is the price level at which many of the BTC options would expire out of the money. This had the potential to create pressure on the market as traders tried to push the price toward this level to avoid losses.
BTC at Risk of Dropping Below $23K
BTC has declined by over 2% in the past 3 hours, and, despite a modest comeback against the bears, prominent analyst Ali Martinez believes the asset might be at risk of plummeting below the $23,000 mark for the first time since Feb. 15.
According to Ali, BTC is dropping below the 100 Exponential Moving Average (EMA) with significant momentum. It could potentially face a correction that would see it fall to the 200 EMA, currently around the $22,700 price point.
#Bitcoin is slicing through the 100EMA, consequently triggering a correction to the 200EMA at around $22,700. https://t.co/7NoBD5ZnyV pic.twitter.com/yyDxnPsTd5
— Ali (@ali_charts) February 24, 2023
Ali called attention to Bitcoin’s current situation yesterday, noting that the asset could surge to the 50 EMA at the $24,200 price level if it can hold above the 100 EMA. Notwithstanding, he warned that failure to keep above the 100 EMA would likely trigger a correction to the 200 EMA that is currently playing out. BTC is trading for $23,187 as of press time, down 4.66% in the past week.