Bitcoin’s (BTC) price dropped 6% between Nov. 13 and 15, exhibiting its first period of correction since breaking above its previous all-time high of $73,880.
Bitcoin 4-hour chart. Source: TradingView
With BTC undergoing price discovery on Nov. 6, the bullish momentum could be sustained if prices remain above $85,000 on the daily chart.
Bitcoin bulls eye liquidity sweep at $85,000
Despite Bitcoin’s recent decline, it maintained a higher high and higher low pattern across both short-term and long-term hourly charts. BTC has sustained a bullish position above 50-day, 100-day and 200-day EMA levels on the 1-hour chart since Nov. 5.
Bitcoin 1-hour chart. Source: TradingView
For bullish continuation, the ideal scenario would be for Bitcoin to exhibit a liquidity sweep around its recent higher low in the $85,500 range.
Bluntz, an independent analyst, mentioned a similar pathway for BTC, indicating that Bitcoin’s current pullback into the $87,000 range is its final low before hitting the elusive $100,000 level.
Overleveraged markets can trigger deeper BTC liquidations
If Bitcoin cannot maintain a daily close above $85,000, the bearish spectrums slightly widen since the futures market has displayed significant overleveraged positions.
CryptoQuant CEO Ki-Young Ju reiterated on Nov. 13 that the estimated futures leverage ratio for the Bitcoin/USDT perpetual market remains at a new high of 270% over its previous top from May 2024.
Bitcoin futures leveraged ratio for USDT pairs. Source: CryptoQuant
Additionally, Bitcoin open interest levels are also around its all-time high range, which means more leveraged positions are open at the moment than ever in BTC’s history.
Another fundamental dilemma with a price discovery phase is that spot order books are extremely thin above $73,884. Bitcoin has been above this price range for less than 10 days; hence, there is a lack of support and resistance around BTC’s current price.
Bitcoin trading volume price ranges. Source: CryptoQuant
Data from CoinGlass highlighted that the largest immediate liquidation range remains near $85,750, where over $127 million in leveraged positions will be wiped out. Thus, a strong case can be made for a liquidity sweep of the $85,000 lows.
Bitcoin liquidation heatmap. Source: CoinGlass
Related: Bitcoin corrects as US inflation data emerges — Is the rally to $100K at stake?
Coinbase premium declined by 88% on Nov. 14
After Donald Trump’s US presidential election win on Nov. 6, the Coinbase premium index jumped to its highest level since April 2024 within 24 hours. A rising premium represented buying pressure from the US retail investors, and the index progressively rose as Bitcoin reached a new all-time high.
Bitcoin Coinbase Premium Index. Source: CryptoQuant
However, on Nov. 14, the premium dropped 88%, which indicated that some investors are beginning to take minor profits or that the initial spot bidding is fading out.
Byzantine General, a Bitcoin futures market analyst, also mentioned that Coinbase and Kraken spot bids continue to dictate a bullish pulse. When spot bids on these exchanges slow down, Bitcoin also exhibits a correction.
Related: Bitcoin price can hit $100K by Thanksgiving if bulls hold key level
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.