Bitcoin's momentum has been strongly bullish as of recent, with the cryptocurrency even breaking past $45,000 effortlessly, and hitting $48,216 on Friday, according to CoinMarketCap.
All of this is good news for the cryptocurrency. However, BTC may be at risk for a sharp reversal soon, as a major analyst just predicted that a massive liquidation event could wipe out millions of dollars from the market.
Ali Martinez, a prominent crypto analyst made a post on Twitter
According to Ali, BTC is very likely to get hit by a massive liquidation event soon.
The tweet from the analyst features a liquidation chart from Coinglass, showing the distribution of several liquidation prices for the leveraged positions held by traders in the market.
Martinez stated in the tweet, that many leveraged traders have placed their stop-loss orders or margin calls near the $45,810 level.
According to the analyst, this makes the $45,810 mark a very attractive target for traders or investors known as "liquidity hunters,".
Martinez estimated that if these liquidity hunters win, they could trigger $54.73 million worth of liquidations from the market as the price of BTC crashes to $45,810.
Martinez adds that this scenario could happen soon, considering the market's high leverage ratio and low trading volume.
To prevent being liquidated, Martinez says that traders and investors should be cautious and alert, and employ appropriate risk management techniques.
The price chart of Bitcoin tells several stories, as shown below:
To begin with, the RSI on the BTC daily chart shows that the cryptocurrency is currently approaching overbought conditions.
Secondly, the cryptocurrency seems to have successfully crossed the $38,600 resistance and seems high enough above it.
Moreso, Bitcoin's current price is held up by the 50-day EMA somewhere around $42,000, contributing to the overall bullish outlook of the cryptocurrency.
From what we can see, the bulls appear to be in control so far.
However, BTC is still yet to clear the $48,969 high from 11 January, indicating that the bulls have one more hurdle to cross.
Overall, we can say that if the "liquidity hunters" from Ali do not win, Bitcoin still has to attempt a break above $48,969 to confirm its bullish dominance.
If the liquidity hunters win, on the other hand, BTC may not even stop at $45,810 as Ali predicts and may go much, much lower.
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