The crypto market has just shown its true colors highly volatile and brutal for high leverage traders. If you look closely at the bitcoin chart today, there was an aggressive move where the price suddenly got dumped by around -3.28%, or dropping by -$2,078 in a very short time. This drop briefly broke below the SMA 50 moving Average line, hitting a low around the $61,450 area, before instantly reversing with a massive green candle (V shape recovery) that brought the price right back to $63,778.
This phenomenon is a classic example of a leverage flush or stop loss hunting. The scenario is always the same market makers intentionally push the price down sharply to trigger the stop loss orders of retail long positions that are heavily stacked below. Once this sell side liquidity is taken out, the price is pumped back up instantly because the market is now cleared of excess weight.
We can see solid proof that this was pure market manipulation directly from coinglass derivatives data. Within just 24 hours, total global liquidations reached $184.53M, with long positions losing $77.12M and short positions following closely at $107.41M. Interestingly, in the short term 1 hour timeframe when the price suddenly reversed upward, $48.88M worth of positions got wrecked, and $47.87M of that total was dominated by Short positions that tried to fomo sell at the bottom (short squeeze).
Futures trading volume on major exchanges also exploded, led by Binance at $18.54B, followed by OKX at $8.40B, and Bybit at $7.08B. Meanwhile, the long/short ratio on Binance and OKX remains quite high between 1.47 and 1.49, meaning that the majority of retail traders are still heavily biased toward long positions.
My Opinion
From a technical standpoint, this kind of stop loss clearing and liquidation flush is actually a very healthy market structure for the long run. Market makers intentionally empty out high leverage passengers so that btc's move toward a new record high later on won't be too heavy. As long as the crucial support areas on higher timeframes like the H4 chart remain safe, the potential to continue the rally upward is still wide open. The stochastic RSI (5,3,3) indicator on the M30 chart has also confirmed a strong golden cross at 90.93 after hitting extreme oversold conditions.
One interesting thing I noticed was the reaction of meme coins like dogecoin $DOGE. While bitcoin made a lightning fast recovery, doge's price seemed to stay quiet and held back. This is completely normal due to the hierarchy of liquidity flow in the crypto market. When the market is chaotic, big capital will always flow into major assets like $BTC, $ETH, or Solana first as a safe haven. Meme coins are usually lagging and will only start to respond massively after Bitcoin's movement begins to slow down and move sideways at the top.
Facing a market full of manipulation like this, choosing to stay on the sidelines, wait and see, and look for clear confirmation is definitely the most rational choice. Holding cash and not forcing a position when the market is volatile is a sign of great trading discipline. It is always better to miss a temporary momentum than to lose your hard earned capital by getting trapped in a fakeout.
Posted Using INLEO
