- Bitcoin & Ethereum Liquidate $62 Million in Short Positions as Weekend Surge Catches Bears Off Guard
This past weekend saw Bitcoin (BTC) and Ethereum (ETH) defy expectations with a price surge, leaving short sellers scrambling. Over $62 million in liquidated positions were recorded on May 25th, according to Coinglass, with Ethereum accounting for a significant portion ($8.58 million). Liquidations occur when traders using leverage fail to maintain their margin requirements, forcing exchanges to close their positions.
At the time of writing, Bitcoin sits comfortably at $68,522, while Ethereum trades at $3,804. These figures represent a notable increase from just a few weeks ago. The question remains, however: will this bullish trend continue?
Bitcoin (BTC): Technical Analysis Hints at Potential Breakout
Examining the BTC/USD chart from a technical standpoint reveals a critical juncture for the Moving Average Convergence Divergence (MACD) indicator. Though currently positive, the 12-day and 26-day EMAs (Exponential Moving Averages) are positioned very close together. This proximity suggests a tug-of-war between bulls and bears for dominance.
If the shorter 12-day EMA surpasses the longer 26-day EMA, Bitcoin could potentially climb to $71,054, aligning with the 1.618 Fibonacci golden ratio. Conversely, a bearish scenario might unfold if the 26-day EMA overtakes the 12-day EMA. This bearish flip could see Bitcoin dip to the 0.618 Fib level at $65,986.
Adding another layer to the analysis, the Elder Force Index (EFI) currently sits flat, signifying a lack of significant buying or selling pressure. This suggests that Bitcoin might consolidate for a period before experiencing a significant move in either direction.
Ethereum (ETH): Bullish Momentum Wanes, Potential Correction Looms
The past week witnessed two prominent bullish candles propelling Ethereum to $3,940. However, the price has since retreated from that peak. The Relative Strength Index (RSI) reflects this shift, indicating that ETH was previously overbought. As the RSI reading has decreased, it suggests a decline in bullish dominance.
Also Read: Ethereum’s Surge Ignites Crypto Market, UNI, AVAX, and BONK Poised for Gains
The On Balance Volume (OBV) reinforces this notion, mirroring the decrease in RSI. This confluence of indicators points towards a possible decline for ETH, with a potential drop to $3,437. However, a surge in buying pressure could invalidate this bearish thesis and propel ETH towards the $4,000 mark.
A Cautious Outlook
While the recent price surge for Bitcoin and Ethereum is encouraging, technical indicators suggest a period of potential consolidation or even a correction. Traders should exercise caution and closely monitor key technical levels and indicators before making any investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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