BTC Price Action Dominated by Sellers: Key Levels to Follow
Bitcoin (BTC) is currently battling to hold the critical $112,000 level following a turbulent day in the crypto markets. On Monday, the sector experienced its largest single-day long position liquidation of the year, with approximately $1.62 billion in long positions wiped out. This significant shakeout has set the stage for an uncertain recovery phase.
Glassnode analysts recently cautioned that Bitcoin’s bull market might be entering a “late-cycle phase,” a period often characterized by heightened volatility and a cautious market sentiment. This insight adds a layer of complexity to Bitcoin’s immediate price movements, as investors and traders weigh the potential for further corrections.
Market Sentiment and Volume Dynamics Indicate Seller Dominance
Although Bitcoin briefly reclaimed levels above $112,000, cumulative volume delta data aggregated by Hyblock points to continued seller dominance in recent price action. This trend raises the probability of a deeper sell-off, potentially pushing prices closer to the lower end of the current trading range.
An examination of retail and whale activity through Binance’s True Retail Longs and Shorts Account metric reveals increased leverage on long positions since Monday’s sharp price decline. The anchored cumulative volume delta (CVD) for accounts holding between 1 million to 10 million USD and those with 1,000 to 10,000 USD further illustrates a fierce contest between buyers and sellers.
When analyzing the bid-ask ratio, set at a 10% aggregate order book depth, selling pressure appears to be easing as Bitcoin attempts to stabilize between $113,000 and $111,000. Despite buyers showing interest within this range, the bulls remain vulnerable, as liquidation heatmaps suggest the price is consuming underlying bid liquidity, with a significant liquidity cluster situated near $107,000.
Perpetual Futures Market Drives Bitcoin’s Price Action
A broader perspective on Bitcoin’s market dynamics — excluding macroeconomic factors, spot BTC ETFs, and U.S. equities — highlights the dominant influence of the perpetual futures market on day-to-day price movements.
Open interest in Bitcoin futures has fluctuated between $46 billion and $53 billion since late July 2022. Although there have been recoveries from support levels at $112,000 (August 3) and $107,000 (September 1), the spot market has seen minimal buy volume, and the aggressive use of long leverage in perpetual futures markets remains largely absent.
This hesitancy among longs to increase volume in both spot and futures markets intensifies the risk for sellers aiming to push prices down. A potential scenario emerges where sellers could target leveraged long positions within the $110,000 to $106,000 range, raising the likelihood of further liquidations.
