An experienced crypto trader has taken to the X social media platform to share a prediction regarding the Bitcoin price, suggesting that it could potentially drop to $63,000 in the near future. This forecast is based on the recent liquidity dynamics that have been influencing the value of the leading cryptocurrency.
Bitcoin Market Structure Indicates Increased Volatility Ahead
In a post dated April 4th on X, KillaXBT provided insights into the potential paths that the Bitcoin price might take in the upcoming weeks. The trader’s analysis revolves around the current technical setup of BTC, highlighting various support and resistance levels visible on its weekly timeframe.
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The analyst elaborated on the recent weeks where investors witnessed multiple sweeps across external highs and internal lows. This sequence began around four weeks ago with a sweep of external range highs, leading to a rapid reversal in the Bitcoin price and ultimately resulting in a bearish weekly closure.
Following this movement, Bitcoin needed to find equilibrium, prompting the cryptocurrency’s weekly candle to return to $71,500. Interestingly, this action appeared to be aimed at clearing out late short positions before prices turned bearish once again, a maneuver that KillaXBT identified as a classic liquidity hunt preceding reversals.
With the previous week’s candle closing on a bearish note, the crypto expert pointed out another significant event – the ongoing week witnessed a liquidity sweep, followed by a clear rejection of the BTC price towards the downside.
Given that Bitcoin’s recovery is predominantly driven by leveraged positions and with the market structure already showing bearish signs, KillaXBT suggested that the available buying pressure might soon dwindle. Consequently, the $64,900 support levels could be vulnerable to another liquidity sweep.
Looking ahead, the technical analyst also predicted Bitcoin breaking below the external range lows at $63,000. Additionally, the market quant emphasized that this downward sweep aligns with expectations of an immediate reversal towards $72,800, where another selling pressure awaits.
Short-Term Holder Behavior Supports Bearish Sentiment in the Near Future
In another post on X, on-chain analyst Joao Wedson shared insights on a noticeable shift in behavior among short-term participants in the Bitcoin market, indicating an increase in selling activity. This shift is reflected in the Short-term Holder Net Position Change metric.
This group typically consists of investors who have held Bitcoin for less than 155 days, making them more responsive to sudden price fluctuations compared to seasoned participants.
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The actions of these new holders can reveal a shift in sentiment, typically towards a bearish outlook. When impulsive selling occurs, it adds to the downward pressure on the Bitcoin price.
As a result, it is plausible that the leading cryptocurrency may head towards $63,000 in the short term before any significant recovery attempts are made. At the time of writing, Bitcoin is trading around $67,256, reflecting a 0.5% increase in the past 24 hours.
Featured image from iStock, chart from TradingView