Bitcoin traded broadly flat around $84,000 on Thursday after a sharp fall from $87,000 wiped out more than $80m in long leveraged positions.
The cryptocurrency moved between an intraday low of about $82,870 and a high of $84,830, a day after selling pressure drove it from $87,000 to just below $84,000. Despite the reversal, overall market sentiment remained bullish, with traders anticipating another rise similar to Monday’s move from below $82,000 to $87,000.
Bitcoin had held above $84,000 for most of the previous 24 hours before dropping from $84,545 to just under $82,873. It recovered the $84,000 level at about 9:35 a.m. EST and reached its session high of $84,830 roughly an hour later.
The rebound was short-lived, however, as bitcoin fell to $83,500 around 30 minutes later. By 12:10 p.m., it had recovered to $84,180.
The modest movement left bitcoin up just over 6% so far this month, while its market capitalisation was virtually unchanged at $1.69 trillion.
The volatile trading also led to significant losses among traders betting on further price rises. Long positions accounted for more than $80m of the $110m in liquidated leveraged positions, marking the second consecutive day in which they represented the larger share.
Across the wider cryptocurrency market, long liquidations made up two-thirds of the $332m in leveraged positions that were closed.
Analysts divided over next move
Some market analysts believe the unsettled trading could precede a larger rise. Technical traders have identified a large inverse head-and-shoulders formation on bitcoin’s charts, with the left shoulder around $61,000 and the head at $54,000.
Under that interpretation, bitcoin is currently close to the pattern’s neckline. A temporary retreat to between $70,000 and $72,000 could form the right shoulder and remove late buyers from the market.
A decisive move above $86,000 could then open the way to a rally towards $100,000 and beyond in the coming months.
Other technical analysts remain cautious after bitcoin was rejected twice in the $87,300 resistance area. Their immediate focus is on support between $80,000 and $82,000.
A confirmed breakdown below $80,000 on the four-hour chart could lead to a deeper fall towards secondary support between $73,000 and $74,000. That would suggest a further decline towards $62,000 before bitcoin could make a sustained recovery above $90,000.
Bitcoin was trading at $83,428.53 on Thursday morning, up 2.4% over 24 hours but about 4.5% below its recent peak of $87,374.
