Recent market data highlights the scale of the process occurring in exchanges after reaching the lowest levels in about two weeks. Figures from the blockchain data tracking source CoinGlass show days with total long liquidations exceeding 300 million dollars. Binance‘s perpetual swaps currently have very little liquidity around the price, with just a bid support wall at the level of 66,266 dollars. Sellers are lying in wait above the 69,000 dollar level.
What’s Happening with Bitcoin?
A side effect of the weekend was a reset in both open interest and funding rates, the latter still being overly positive but off recent peaks. James Van Straten, research and data analyst at crypto analysis firm CryptoSlate, said that Bitcoin is trading 5,000 dollars below its ATH level:
“We need each exit to be higher for our next leg up.”
Van Straten noted that funding rates have not been negative since September of last year and he is quite skeptical that they will revert:
“We have been in an uptrend since October and continue to be, so positive funding persists and resets occasionally when we are very volatile.”
The Halving Process and Bitcoin
Bitcoin miners are on their way to enjoying the last month of the 6.25 Bitcoin block subsidy before the April halving event. Discussions continue on how this event will affect Bitcoin’s price behavior, with the all-time high never occurring before a halving event, but months after it.
Some experts therefore believe the current journey to all-time highs could be completed earlier than other price cycles. However, Bitcoin may still adhere to the classic playbook around the halving event itself.
Popular investor and analyst Rekt Capital highlighted the forward risks for hodlers in his latest content. Rekt Capital commented with an explanatory chart on March 17:
“In two days, Bitcoin will officially enter the ‘danger zone’ (orange) where historical pre-halving retracements have started. Historically, Bitcoin has experienced pre-halving retracements 14-28 days before the halving event.”
In past halving years, this dangerous zone produced corrections of up to 40%, far beyond the current maximum decline from the recent all-time high of approximately 73,700 dollars. Rekt Capital further commented:
“Bitcoin is gradually moving away from the pre-halving rally phase to the pre-halving retracement phase.”
He also noted that standard cycle events continue despite consistent purchases by US spot Bitcoin exchange-traded funds.
