Bitcoin price volatility is alarming, $16,500 is key liquidation level for BTC

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Bitcoin long and short positions see parity after BTC price volatility hits an all-time low. Experts believe that institutional traders may be looking for liquidity at the $16,500 level, based on the heatmap of liquidation levels. BTC could gather liquidity between the $16,200 and $16,500 level before hitting the $18,000 target.

Bitcoin price missed Santa’s rally as the asset’s volatility hit an all-time low. The events of the past week did not push for volatility in BTC, in the absence of a macroeconomic trigger for the price trend of the asset.

Also Read: Bitcoin Braces for Volatility Spike After Holding Up Through US Stock Market Bloodbath

Bitcoin Price Volatility Hits All-Time Low, BTC Misses Santa’s Rally

Bitcoin volatility hit an all-time low over Christmas. Periods of low volatility precede periods of explosive Bitcoin price movements. Will Clemente, a Bitcoin analyst, shared a chart of the Bitcoin Volatility Index, highlighting BTC’s new historic low volatility.

Bitcoin Historical Volatility Index

Crypto experts Twitter have spotted similarities between Christmas 2018 and the 2022 cycle. Christmas 2018 marks Bitcoin’s final bear market phase during its previous halving cycle. Analysts are confident that the duration between BTC’s all-time high and Christmas lows is broadly similar.

Bagsy, an analyst at crypto Twitter, believes the largest asset by market capitalization may not bounce above the $25,000 level. Asset recovery would largely be based on the halving year, 2024.

After BTC missed its Santa Claus rally, the cryptocurrency is gearing up for its next market low. Crypto analyst and trader Toni Ghinea predicted a bullish trap between $17,500 and $19,000 in December 2022 before a final crash at the $11,000 to $14,000 level in Q1 2023.

Could BTC collect liquidity before it hits the $18,000 level?

Based on data from Bitcoin liquidity charts, technical analyst CrypNuevo believes that there is a strong possibility that the $17,100 and $17,500 level will be tagged before the end of 2023.

Clearance Levels Heatmap

According to the Liquidation Levels Heatmap, there is $50 billion of liquidation between the $13,500 and $14,000 level. If the price of BTC drops to this level, cascading liquidations could increase the pressure on the asset. Analysts believe that institutional traders will slowly increase their activity over the next few days and markets will gain volatility.

Analysts argue that liquidity levels are critical to retail investor activity. In a downtrend, CrypNeuvo argues that traders cannot rule out the possibility of a short-term and long-term set-up in a downtrend. The expert believes that picking up BTC between $16,200 and $16,500 is the ideal trade setup before the asset hits the $18,000 level.

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