Bitcoin forms another dreaded “Darth Maul” candle; Liquidation of $ 9 million in shorts

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After firmly consolidating its position in the $ 7,000 region, Bitcoin bulls and bears are once again at an impasse. This is clear when looking at the price action of the benchmark cryptography seen earlier today, when it hit $ 7,800 before plunging below $ 7,500.

This movement formed what is jovially called a “Darth Maul” candle – a reference to the Star Wars villain who wields a double-sided saber.

The effects of this move on traders are quite notable, as it liquidated more than $ 9 million in short positions before replacing crypto in its recently established trading range.

Bitcoin’s volatility liquidates millions as lateral trading persists

The volatility Bitcoin observed earlier today is approaching its recent rally in the $ 7,000 region to peaks of $ 7,800, as resistance to those peaks has proven insurmountable for bulls.

It doesn’t seem like that resistance has been gone since then, as it turns out to be the price crypto rallied earlier today before seeing an ultra-fast rejection.

A merchant pseudonym on Twitter talked this recent price action, explaining that it prevented traders back and forth before bringing crypto back into its trading range.

“BTC: Stop out on both sides and back in the range…”

Bitcoin

Image courtesy of Big Cheds

A byproduct of this volatility has been a massive increase in liquidations seen by leveraged traders, with a total of $ 9 million in open positions being liquidated, according to Coinalyze data.

This comes close to the recent upward movement in the $ 7,000 region to highs of $ 7,800, which liquidated $ 75 million in positions and led the cryptocurrency’s open interest in Bitmex to plunge.

These multiple liquidations seen by sellers could have an impact on the dynamics between bulls and bearish in the coming days.

What does this mean for BTC in the future?

In the short term, this recent volatility should lead Bitcoin to see new trades in the range, as it wiped out over-leveraged traders and brought crypto back to $ 7,500.

Another popular crypto analyst talked about it recently Tweeter, explaining that trying to trade scalp in this range is very risky.

“BTC: both sides have swept. Let’s just go back to the range for now. Also the reason why scaling this now is very risky -> no drawdown on liquidity… Take it easy and wait for a clear direction, ”he noted.

Bitcoin

Image courtesy of George

Featured image from Unsplash.



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