The frequency of Bitcoin (BTC) reaching higher support price levels as well as the “lack of immediate froth” in the derivatives markets suggests that its price is unlikely to retrace down to $50,000 anytime soon, according to a crypto analyst.
Senior analyst at digital asset fund UTXO Management, Dylan LeClair, explained in an analyst note on April 7 that if Bitcoin rises back into the $70,000-$75,000 price range, it will put significant pressure on short positions.
“As we’ve consolidated, an increasing amount of short liquidations are building from 70-75k,” he stated.
If Bitcoin’s price rises to $70,000, approximately $174.17 million will be liquidated, as per CoinGlass data.
Bitcoin liquidation map. Source: CoinGlass
Should it reach the upper boundary of LeClair’s range, hitting $75,000, around $830 million worth of short positions would face liquidation.
This translates to roughly a 7.8% increase compared to Bitcoin’s current price of $69,344. Likewise, a similar percentage change of 7.5%, but in downward movement, occurred on March 15, resulting in $525.2 million in liquidations.
LeClair explained although a decline in Bitcoin’s price to $50,000 — which equates to a 27% decrease — could trigger substantial liquidation of long positions, he doesn’t foresee it, considering the recent price shifts and the increasing support levels.
“While there is a large cluster of longs that could be taken out at ~50k, given the structure of higher lows and the lack of immediate froth in the derivatives landscape currently, I find it pretty unlikely we revisit that level,” he stated.
“Not impossible of course,” he warned. Bitcoin’s price last dipped below $50,000 on Feb. 13, hitting $49,725.
Just a day before, on February 12, it reached $50,000, a mark not hit in two years, last reached in December 2021.
He backed up his claims by citing the recent development by global asset manager BlackRock updating its Bitcoin exchange-traded fund (ETF) prospectus on April 5, adding five big Wall Street firms as new authorized participants.
New members include ABN AMRO Clearing, Citadel Securities, Citigroup Global Markets, Goldman…
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