Bitcoin prices have retreated heavily during the Monday morning Asian trading session, falling back below the psychological $60,000 level again.
With bitcoin in retreat again, analysts are looking for technical indicators and signals that could provide clues as to where it is heading next.
On Aug. 12, crypto derivatives data provider CoinGlass reported that the liquidity heatmap is showing key first-test lines at around $56,800.
If BTC prices bounce off this level, it will test higher ones but a weaker bounce could result in further downsides, it noted.
Bitcoin Recovery or More Pain?
The liquidation heatmap provides a visual representation of potential liquidation levels for leveraged positions in the Bitcoin market. It shows where large numbers of stop-losses and liquidation orders are clustered in the market.
CoinGlass currently reports that there has been $156 million in liquidations over the past 24 hours, the majority of which are in long BTC positions.
If BTC prices fall to these ‘hot’ levels, they could trigger a cascade of liquidation events as leverage gets flushed which would send prices lower quickly. This is what happened last Monday, Aug. 5, when BTC dumped $12,000 in less than a day.
Since then, it has recovered to reclaim $62,000 late last week, but momentum has waned over the weekend, resulting in a fall to $58,270 in early trading on Aug. 12.
On Aug. 11, analyst ‘CrypNuevo’ told his 107,000 X followers that the most likely next move is for BTC to fall halfway down last week’s wick, which would see it drop to around $53,400.
“Not sure which news or event will be the catalyst this time, but it feels that the chart is ahead this time,” they added.
Altcoins Bleeding …Again
On Aug. 11, MN Capital founder Michaël van de Poppe observed that the altcoin market capitalization has declined by 60% from its all-time high, while the BTC market cap was down just 15% as its dominance increased.
Meanwhile, trader and analyst ‘Mags’ observed that the altcoins market cap was testing the long-term upwards-sloping trendline again.
“Over the past seven years, each time the altcoins market cap has tested this support zone, we have seen a significant bounce in altcoins,” they added.
Most of the altcoins are doing anything but bouncing today with Solana (SOL), Toncoin (TON), and Dogecoin (DOGE), all dumping more than 7%. The rest are a sea of red at the moment, following their big brother back down as usual.