Bitcoin breaks below EMA50 daily for the first time since April, raising caution among traders and institutions.
Derivatives data shows $105.77M liquidations in 24 hours, with $98.38M from over-leveraged long positions.
Options volume rises 14.06%, signaling hedging activity, while top traders on Binance maintain a bullish stance.
Bitcoin is as of writing, trading at $113,721, marking a 1.67% decline in 24 hours and 5.63% over the past week. For the first time since April, the cryptocurrency has slipped below the EMA50 daily, a level long viewed as a key indicator of market strength.
BTC Breaks Below the EMA50 Daily
A tweet by Doctor Profit emphasized that Bitcoin has lost its EMA50 daily support, breaking through the “golden line” with relative ease. This level has historically provided dynamic support, with several rebounds since April fueling bullish continuation.
In previous corrections, traders and institutions relied on the EMA50 as a psychological anchor, quickly stepping in to defend the level. The current breakdown, however, marks a shift as buyers failed to protect this support, pointing to weakening bullish momentum.
The bigger picture also counts. Failing to maintain above $120,000, Bitcoin entered a period of consolidation. The breakdown of this EMA50 implies a loss of buyer strength and this has the possibility of a deeper retracement unless the level can be recovered in a short period.
Derivatives Data Shows Rising Activity
Bitcoin derivatives data reveals strong activity, with trading volume up 19.93% to $86.13 billion. This indicates heightened speculation and hedging activity among participants. Meanwhile, open interest declined by 0.62% to $80.82 billion indicating traders are closing positions due to volatility.
The options market has increased significantly with options volume up 14.06 percent to 6.52 billion and options open interest up 4.05 percent to $54.40 billion. These figures indicate a growing demand for structured hedging strategies as traders prepare for larger moves.
Despite caution among retail participants, professional traders remain positioned for upside. On Binance, the BTC/USDT long/short ratio is 1.6504, while OKX shows 1.62. Top traders on Binance display even stronger confidence, with long/short positions at 1.8947.
Liquidations Signal Weakness in Long Positions
Liquidation data reveals a market leaning heavily on leveraged longs. Overall, the past 24 hours saw a total of $105.77 million liquidated, with longs taking $98.38 million (7.39 shorts, 134x).
A shorter-period checks volatility-prompted liquidation by both sides, yet the magnitude of long liquidations undermines the strength of bullish traders. One-hour and four-hour liquidations, although smaller, show consistent patterns of weak positioning being removed.
The derivatives landscape paints a mixed picture. While volume and options activity expand, the dominance of long liquidations signals that traders are still adjusting risk. This reset phase may continue until Bitcoin establishes stability above or below the EMA50.
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