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Home Cryptocurrency news Bitcoin

Lack of Liquidity Near Current Bitcoin Price Hints at Targets Of $6900, $7900

Tony Spilotro by Tony Spilotro
1 year ago
in Bitcoin, Cryptocurrency news
Reading Time: 3min read
bitcoin price
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Bitcoin price has been trading within a tight trading range over the past week, making a few sharp stop runs in the process to liquidate over-leveraged margin traders.

One prominent crypto trader says that the stop runs are due to the complete lack of liquidity near the current Bitcoin price, and that they will continue until Bitcoin breaks out to either $6900 or $7900 where greater liquidity is located.

Stop Runs to Continue Until Bitcoin Price Finds Liquidity At $6900 or $7900

This week, the cryptocurrency market was shaken out by a powerful spike upward from low $7,000 to as high as $7,800, before a sudden move in the opposite direction brought the price of the leading crypto asset by market cap right back to where it started, liquidating traders in both directions.

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Related Reading | Eat My Shorts: Everything You Need To Know About The Bitcoin Bart Pattern 

The move marked the return of the “Bart Simpson” Bitcoin price chart pattern – an unusual chart pattern that is due to low liquidity and low volume in crypto markets.

The “Bart Simpson” move liquidating traders in this price range, has wiped out any remaining liquidity in this price range, and according to one crypto trader, vicious stops runs like what has been witnessed in crypto markets this week will continue until Bitcoin price breaks out of the range and heads to either $6,900 or $7,900 where more liquidity lies.

https://twitter.com/jacobcanfield/status/1202819685202481153?s=21

Lack of Liquidity Is Why Most Crypto Assets Are Worth Zero

Liquidity is closely tied to value. Assets with extremely low liquidity, despite possibly having a large value attached to them, like Bitcoin price does, are subject to extreme volatility and deviations in price as it takes very little capital to move the price of the asset.

It’s the lack of liquidity in crypto assets another analyst says is why as much as 99.99% of them are worth zero.

Friendly reminder that 99.99% of tokens in this space will, and most likely currently are due to liquidity, worth ZERO.

— Flood [BitMEX] (@ThinkingUSD) December 5, 2019

While that’s not entirely true, many of the assets the analyst is referring to do have a value, however, due to the lack of liquidity in the markets of these assets, any investors with a sizable holding of the asset would tank the price almost immediately should they attempt to cash it out all at once.

Market sell orders of such magnitude would wipe the meager buy orders out of any crypto exchange’s order books quickly, causing the price to fall lower and lower to find more liquidity to cash out into.

Related Reading | Bah Humbug! If Bitcoin Bulls Can’t Reclaim $7,800 It’s Coal For Christmas 

The lack of liquidity is also what allows whales to easily push the price of an asset in either direction at their will, using such methods. Even the fact major players can manipulate prices as they please diminishes the overall value crypto assets provide.

So while the next time you check your portfolio app and see the value of your favorite altcoin or crypto asset, think about what will happen to it if everyone starts to try to cash it out all at once

Tags: Bart Simpsonbitcoincryptojacob canfieldliquidity
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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