"The Market Has Left Easy Mode" Analyst Warns: Prepare For Market-Wide Liquidations

Bitcoin faces increased volatility risks as leveraged trading and options expiry contribute to market uncertainty, with analysts cautioning against false signals from chart patterns and advising caution ahead of significant options expiries that could impact investor sentiment and potentially lead to flash crashes.
"The Market Has Left Easy Mode" Analyst Warns: Prepare For Market-Wide Liquidations

Key Insights

  • Analysts are warning that Bitcoin's easy mode is over, and there is now more potential for increased volatility due to leveraged trading and options expiry.

  • Leveraged traders are at the most risk of liquidations, as seen by the recent liquidation trend.

  • An analyst warns that the symmetrical triangle chart pattern on Bitcoin can mislead traders with false signals.

  • The upcoming expiry of a large number of Bitcoin options could significantly affect the market in the coming days

  • Analysts recommend caution due to potential flash crashes and dampened investor sentiment.

Bitcoin has been consolidating underneath the $71,000 resistance for weeks now, after making a new all-time high of $73,000 around 13 March.

This consolidation has been the source of investor frustration for weeks.

However, recent trends suggest that we might be looking at some volatility over the coming days, and here is everything you need to know:

Bitcoin No Longer on Easy Mode

According to a recent tweet from trader and analyst, Honeybadger, Bitcoin has left what he refers to as “easy mode”.

By “easy mode”, Honeybadger means that the days of traders navigating the Bitcoin market with relative ease might be over, considering how saturated the market has become with leveraged trades.

In essence, the whales and market makers are starting to “exploit the high emotions and degenerate (degen) behaviour of leveraged traders”.

<div class="paragraphs"><p>Bitcoin’s liquidation chart</p></div>

Bitcoin’s liquidation chart

We can see the result of this trader behaviour in the liquidations chart from Coinglass above.

On 5 March, we had $255 million worth of liquidations on long trades alone. Similarly, we had $155 million on 19 March, and another $108 million only a week ago, on 2 April.

<div class="paragraphs"><p>Possibility of false breakouts</p></div>

Possibility of false breakouts

HoneyBadger also pointed out that the Bitcoin chart is currently forming what appears to be a symmetrical triangle, as illustrated above.

Technically, this chart pattern is considered a neutral one, unlike the ascending/descending triangles. This makes it hard for traders to predict whether the market will go up or down.

To this end, Honeybadger went further to warn that this pattern can be rife with potential “false breakouts”, that could mislead traders into making hasty trades.

In total, traders are advised to be aware of the risks and trade accordingly.

The Options Expiry Wave

Adding further complexity to the mix, Greeks.live also tweeted recently on X, about the market bracing for the expiry of a staggering 21,000 Bitcoin options (all with a notional value of $1.5 billion)

<div class="paragraphs"><p>Incoming options expiry</p></div>

Incoming options expiry

According to the data aggregation service, the ‘max pain point’—or the strike price with the most open contracts—stands at around $69,000.

Greeks.live notes that this event could affect the market significantly, considering the recent spike in US CPI data and inflation rates and the behaviour of the ETFs.

In essence, Greeks.live means that in light of the halving, the recent slowdown in ETF inflows and the lack of new “hot spots” in the market, investor sentiment has been dampened, and most of them are likely to dump/sell over the short and medium terms.

Put simply: We are in for a lot of volatility over the short and medium terms.

The Road Ahead

Despite the volatility of the market, Bitcoin's price has been in a consolidation phase between $69,000 to $71,000.

Analysts like Rekt Capital continue to observe the market, as outlined by this tweet.

<div class="paragraphs"><p>Bitcoin maintains its range</p></div>

Bitcoin maintains its range

The tweet above shows that the decline in Bitcoin’s implied volatility indicates steadiness, and that unless the old ATH range low gives way, Bitcoin will likely consolidate further.

Overall, the point of most of these analysts is that investors should proceed with caution from here, considering the possibilities of flash crashes on Bitcoin.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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