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Bitcoin’s (BTC) recent 11% weekly gains have injected excitement into the crypto market, but some traders are warning that a retracement might occur before BTC pushes toward new all-time highs. As volatility intensifies, liquidations are becoming a concern for leveraged positions, raising questions about the market’s next move.
Liquidation Risks Loom As Bitcoin Holds Key Levels
Bitcoin’s rally to $68,400 has some analysts eyeing potential liquidation events. According to pseudonymous derivatives trader TheKingfisher, Bitcoin’s recent trading activity is tied to the volatility seen back on July 29, when BTC dropped sharply to $49,000 just five days later.
“Even traders using 50x leverage who bought at the top haven’t been liquidated yet, with prices holding at $67,350,” TheKingfisher wrote on Oct. 17. However, the trader warned that there’s a 62.48% chance of liquidation within 24 hours, signaling that a shakeout could be imminent.
TheKingfisher also noted that the expanding liquidity pool could trigger a volatile “Darth Maul candle” — a rapid price spike and drop — to clear out both longs and shorts in one swift move.
Retracement Before the Next Leg Up?
Michael van de Poppe, founder of MN Capital, believes Bitcoin is following a familiar pattern seen over the past seven months. In a post on X (formerly Twitter), van de Poppe highlighted that BTC might retrace to around $64,130 to tap into demand-side liquidity before staging another rally.
This cautious outlook aligns with the surge in Bitcoin Futures open interest (OI), which reached an all-time high of 179,745 BTC on Oct. 16, according to K33 Research. The increase in OI, valued at around $1.2 billion, has made some traders nervous, as flush-outs of long positions often follow such spikes.
Also Read: Bitcoin Dominance Soars – 7-Month Downtrend Ends, $1.5B Pn ETF Inflows Spark Optimism!
Not everyone is convinced that the rising OI will lead to a market pullback. Pseudonymous Bitcoin trader Wicked argues that the spike in OI on CME Bitcoin futures signals further bullish momentum. Similarly, crypto analytics platform CoinGlass suggests that the increase in OI could precede a significant price movement, though it’s unclear in which direction.
A Critical Moment For Bitcoin
Bitcoin’s next move is likely to be decisive. While some analysts anticipate a short-term dip to gather liquidity, others see the surging OI as a sign of continued bullishness. With volatility rising and liquidations hanging in the balance, traders will need to tread carefully. Whether BTC corrects or soars, the market’s current setup promises excitement — and risks — ahead.
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.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
