$BTC
Current Price: 121,704.02
Change: -2.23%
I’ve been seeing many comments on my posts either disputing this idea or claiming there’s no reasoning behind it. Here, I want to dive deeper into the WHY by analyzing the weekly time frame.
In recent months, we’ve witnessed small-scale patterns showing what typically happens after slow, downward consolidations.
💡 Understanding the Mechanics
During slow downward moves, as shorts accumulate, they leave a trail of buy orders above the price. These orders don’t automatically fill if the price is below — they are short stop-loss orders and short liquidation orders.
As Bitcoin slowly rises, sooner or later, a high-volume candle on the minute chart pushes price into these buy orders. What follows is a fast upward candle, triggering stop-outs, liquidations, and new long entries.
Think of this as a position replacement mechanism. Market makers don’t directly control your trades, but they entice traders into positions that benefit the liquidity providers. The goal is simple: reclaim leveraged liquidity and limit excessive profits.
These fast moves, historically called “stop hunts,” are extreme, sudden price movements that liquidate traders’ positions. Chart analysis remains the most reliable way to spot them, not heatmaps or predictive platforms like Coinglass, which are estimates at best.
📉 Chart Observations
On my chart, red boxes mark zones of upward consolidation that were never retested. These zones hold long position sell orders that don’t fill when price is above. Imagine a ladder of sell orders stretching down through the boxes — this is the fuel for rapid downward moves.
💬 Addressing Skepticism
You may ask: how could Bitcoin drop to $8,000 with ETFs, long-term holders, and large institutions in play?
The answer: most of Bitcoin’s market cap, even holdings of leveraged institutions, is liquidity for derivatives and trading. This liquidity is neutral — it flows in and out, inflating and deflating the market. A flash crash doesn’t destroy Bitcoin’s fundamental value; it just transfers wealth temporarily into fewer hands before the market stabilizes.
In other words, Bitcoin is a balloon of dollars. Liquidity inflates it, stop-loss and liquidation events temporarily deflate it, and the balloon is quickly re-inflated.
🧠 Technical Setup
We have two key trendlines:
1. Ascending Channel (Red Line): Starts around $8,000, representing long-term support and resistance zones.
2. Bearish Trendline (Grey Line): Bitcoin has consolidated around this trend since its previous bottom. A breakdown of this trendline could push BTC to $35,000.
From there, measuring the downward movement from $8,000 forms a bear pennant pattern, potentially pushing BTC down to $8,000. Support and resistance levels align with liquidity zones, creating technical confluence for this theory.
⚡ The More the Delay, the Stronger the Drop
Every time Bitcoin fails to drop and instead moves up, sell orders accumulate. The longer this goes on, the more fuel is stored for a fast, powerful crash. The more liquidity in these zones, the faster price will fall once triggered.
In theory, this could result in some of the fastest downward movements in Bitcoin’s history — a market literally filled with “rocket fuel,” waiting for a fuse to be lit.
📌 Conclusion
BTC’s price could drop to $35,000 initially, forming technical patterns that may ultimately retest $8,000.
Liquidity and technical levels make these rapid moves predictable to some extent.
Market mechanics, combined with leveraged positions, amplify speed and severity of crashes.
Understanding these dynamics is crucial for traders looking to survive and capitalize on extreme volatility.
#BTC TC #Bitcoin #CryptoTrading #TechnicalAnalysis #CryptoEducation #MarketMechanics
