Crypto Setting Up For Squeeze, Will BTC Price Get In The Way?

Bitcoin is showing weakness as BTC price trades in a tight range, the number one crypto by market cap saw a small uptick in volatility during today’s trading session. However, the price action was smothered by poor performance in traditional equities.

At the time of writing, BTC price trades at $19,00 with a 4% loss in the last 24 hours and a 3% loss over the past week. As Bitcoin trends lower into support, the momentum indicator follows suggesting there is little conviction to resume bullish momentum.

BTC’s price trends lower on the 4-hour chart, heading into yearly lows? Source: BTCUSDT Tradingview

BTC Price Liquidity Trends To The Downside As Bitcoin Loses $19,000 Levels

In the coming two weeks, the crypto market will go through a major milestone with Ethereum’s “Merge”. The second crypto by market cap will complete its transition to a Proof-of-Stake (PoS) consensus. As a result, ETH price has been outperforming BTC price.

“The Merge” is scheduled for mainnet deployment between September 13^th to 15^th, this event is bound to bring volatility into the market. Today, Ethereum core developers announced the successful implementation of the “Bellatrix” update.

A few hours later, the BTC price broke below a critical support zone and trendline created since the August bullish price action. Data from Material Indicators shows liquidity in the orderbook for crypto exchange Binance has been getting thick to the downside.

As the price of Bitcoin trends lower, liquidity followed and sits near the cryptocurrency’s yearly lows between $17,600 to $18,000. In the meantime, all investors class have been selling into the price action, from retail to large investors.

Bitcoin BTC Price BTCUSDT — BTC price (blue line on the chart) moving into downside liquidity on low timeframes. Source: Material Indicators

If today is any indicator of what traders should expect from “The Merge”, and bulls can support BTC price’s current levels, the cryptocurrency might take another leg down into the pool of bids shown in the chart above. Next critical support levels sit at $17,000 and $16,000.

For a deeper dive into “The Merge” and its potential implications for the price of Ethereum, check out the analysis from our Editorial Director Tony Spilotro.