Key Points
- Bitcoin’s recent drop from its all-time high has led to a classic short setup, with potential for a larger rally.
- A Bitcoin whale’s massive long position faced market resistance, leading to a significant loss.
Bitcoin experienced a 3.79% intraday drop from its all-time high of $111,689 on May 23rd.
This drop has led to a tug-of-war between bulls and bears in the market.
Short Setup and Potential Rally
The drop created an opportunity for shorts to enter the market as momentum cooled and weak hands looked ready to fold.
However, Bitcoin has since rebounded nearly 3% from that close, suggesting the short setup may have backfired.
A Bitcoin whale recently made a large bet with an 11,000 BTC long position, worth $1.25 billion at 40x leverage.
However, as Bitcoin neared the liquidation cluster around $105k, the whale closed out the trade, leading to a significant loss.
Market Reaction and Future Predictions
Despite this, the whale flipped short with nearly $1 billion on the line, setting the liquidation mark at $111,280.
This move coincided with two bullish macro catalysts, forcing a premature exit and a further loss of $15.87 million.
Bitcoin’s Taker Buy Volume has since surpassed $110.7 million across all exchanges, with Open Interest surging 3.74% to $77.44 billion.
This indicates that traders are racing to seize the opportunity, potentially leading to a larger rally.
The market’s reaction to these events suggests strong underlying bid support for Bitcoin.
However, about 61.81% of Binance’s BTC/USDT perpetual contracts are leaning short.
This could lead to a liquidity cluster at $108,478 with $68.57 million in leverage if demand cracks, or a fresh run at a new all-time high if support sticks.
