Bitcoin

Delta

Time

<ul>
 <li><em>Bitcoin rose above $44,000, but traders should be cautious.</em></li>
 <li><em>A cluster of liquidity around $45,870 could lead BTC to retrace.</em></li>
</ul>
<p><a href="https://ambcrypto.com/search/bitcoin" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">Bitcoin’s [BTC]</a> brief jump above $44,000 on the 21st of December brought back optimism to holders of the coin.</p>
<p>The rise instilled some confidence that BTC’s time to shine has not yet fizzled out, especially as Bitcoin’s price failed to make any big moves in the recent past.</p>
<p>However, traders need to exercise caution despite the price increase. This was the <a href="https://cryptoquant.com/insights/quicktake/6582ae35353c707259f2fb03-The-Bulls-Run-Is-a-Market-Tumble-on-the-Horizon" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">opinion</a> of Greatest_Trader, an author on CryptoQuant.</p>
<p>According to Greatest_Trader, Bitcoin’s price action has impacted the increase in long positions. This inference was indicated by the king coin’s Funding Rate.</p>
<h4>Time to be careful with the longs</h4>
<p>AMBCrypto checked out the <a href="https://app.santiment.net/charts/hI8VGga2__sCl" data-wpel-link="external" target="_blank" rel="noopener noreferrer nofollow">Funding Rate</a> and found out that the metric was positive. By definition, a positive Funding Rate means long positions were predominant in the market at press time.</p>
<p>A long position means a perpetual contract predicting a price increase for a cryptocurrency to make profits from the bet.</p>
<div id="attachment_359809" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Bitcoin-BTC-07.15.16-21-Dec-2023.png" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-359809" decoding="async" class="size-full wp-image-359809" src="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Bitcoin-BTC-07.15.16-21-Dec-2023.png" alt="BTC price and Bitcoin funding rate chart" width="3840" height="1300" srcset="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Bitcoin-BTC-07.15.16-21-Dec-2023.png 2560w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Bitcoin-BTC-07.15.16-21-Dec-2023-300x102.png 300w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Bitcoin-BTC-07.15.16-21-Dec-2023-1024x347.png 1024w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Bitcoin-BTC-07.15.16-21-Dec-2023-768x260.png 768w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Bitcoin-BTC-07.15.16-21-Dec-2023-1536x520.png 1536w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Bitcoin-BTC-07.15.16-21-Dec-2023-2048x693.png 2048w" sizes="(max-width: 3840px) 100vw, 3840px"></a>
 <p id="caption-attachment-359809" class="wp-caption-text">Source: Santiment</p>
</div>
<p>If the Funding Rate is negative, it means that shorts are dominating the market. But for the analyst, the current Funding Rate may suggest a bullish outlook, as the <a href="https://ambcrypto.com/what-bitcoin-holders-are-up-to-as-btc-pulls-back-to-43000/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">trend</a> could lead to a rise in long liquidations.</p>
<p>However, Greatest_Trader called for vigilance in his publication, noting that:</p>
<blockquote>
 <p>“If this trend persists, the market could see a significant shift in the short term. Specifically, there’s a potential risk of a ‘long liquidation cascade’, where a rapid sell-off could occur, dramatically affecting the market”</p>
</blockquote>
<p>The analyst’s conclusion led AMBCrypto to assess possible points that longs could be liquidated. To do this, HyblockCapital’s Liquidation Levels <a href="https://hyblockcapital.com/liquidationlevel" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">indicator</a> came in handy.</p>
<p>Liquidation Levels are estimated price positions where a trader’s position could be wiped out.</p>
<h4>High leverage, impending liquidation</h4>
<p>According to the chart below, there was a cluster of liquidity around the $44,900 to $45,870 region. Typically, the BTC price may head towards this zone—however, traders with a high leverage risk being liquidated at any of these points.</p>
<p>Upon hitting liquidation, Bitcoin’s price may also reverse.</p>
<p>The Cumulative Liquidation Levels Delta (CLLD) also suggested a bearish bias for Bitcoin. The CLLD, at press time, was positive. But the reading could lead the charge for a full retrace, with BTC potentially dropping below $43,000.</p>
<div id="attachment_359820" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2023/12/newplot-9.png" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-359820" decoding="async" class="size-full wp-image-359820" src="https://statics.ambcrypto.com/wp-content/uploads/2023/12/newplot-9.png" alt="Bitcoin liquidation levels" width="1386" height="829" srcset="https://statics.ambcrypto.com/wp-content/uploads/2023/12/newplot-9.png 1386w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/newplot-9-300x179.png 300w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/newplot-9-1024x612.png 1024w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/newplot-9-768x459.png 768w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/newplot-9-590x354.png 590w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/newplot-9-400x240.png 400w" sizes="(max-width: 1386px) 100vw, 1386px"></a>
 <p id="caption-attachment-359820" class="wp-caption-text">Source: HyblockCapital</p>
</div>
<p>In terms of Open Interest, Coinglass <a href="https://www.coinglass.com/currencies/BTC" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">showed</a> that it had increased from the fall experienced on the 18th of December. The Open Interest is the amount linked to the number of outstanding futures positions in the market.</p>
<p>The increase implies that more liquidity has been allocated to BTC futures contracts.</p>
<p style="text-align: center;">Read&nbsp;<a href="https://ambcrypto.com/predictions/bitcoin-price-prediction" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">Bitcoin’s [BTC] Price Prediction</a>&nbsp;2023-24</p>
<p>At the same time, it is important to consider the effect of the Open Interest on prices. Since the Open Interest increased and Bitcoin’s value fell, it suggests increasing downward momentum.</p>
<p>Should BTC fail to reclaim $44,000 as the Open Interest increases, there is a <a href="https://ambcrypto.com/how-will-bitcoin-prices-end-2023-heres-what-the-prediction-says/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">chance</a> that the coin might drop to $42,000.</p>
<div id="attachment_359830" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Screenshot-2023-12-21-at-07.48.00.png" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-359830" decoding="async" class="size-full wp-image-359830" src="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Screenshot-2023-12-21-at-07.48.00.png" alt="Bitcoin Open Interest" width="1374" height="383" srcset="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Screenshot-2023-12-21-at-07.48.00.png 1374w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Screenshot-2023-12-21-at-07.48.00-300x84.png 300w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Screenshot-2023-12-21-at-07.48.00-1024x285.png 1024w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Screenshot-2023-12-21-at-07.48.00-768x214.png 768w" sizes="(max-width: 1374px) 100vw, 1374px"></a>
 <p id="caption-attachment-359830" class="wp-caption-text">Source: Coinglass</p>
</div>

Bitcoin price rises to $43K: Does BTC’s prediction hold now?

AMBCrypto

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