Bitcoin faces a critical test at $57,000 as analyst Joao Wedson warns of potential liquidation risks that could trigger a deeper decline. According to AMBCrypto, Wedson points to unliquidated long positions stacked below $57,000 as a major concern, arguing this pattern mirrors the 2022 sequence when prices plunged before finding bottom. The analyst maintains that while liquidation events historically create prime accumulation opportunities, Bitcoin's current setup keeps the cryptocurrency exposed to further downside over the next couple of days. Bitcoin has extended its decline and continues struggling to clear the $65,000 psychological threshold after another failed run at the level.
The crypto market was little changed on Tuesday after falling overnight as the short-lived optimism around a Strait of Hormuz deal evaporated. President Donald Trump's demand for 50 years of compensation from Iran as a condition of any negotiation dashed hopes of a near-term resolution and pushed Brent crude up to $89.08, more than 12% above last week's low. Bitcoin is down 1.68% over 24 hours as Trump's demand killed the Hormuz reopening narrative overnight, leaving crypto and equities flat ahead of a pivotal CPI report. The Strait of Hormuz relief trade unraveled after Trump's demand for 50 years of Iranian compensation, pushing oil back to $89 and leaving crypto markets under pressure.
Adding to Bitcoin's challenges, Strategy's sale of a further 1,690 BTC on Monday, the fourth consecutive weekly reduction, added an extra layer of pressure. The company has not bought bitcoin since June, creating additional selling pressure in an already bearish market environment. This sustained selling from major institutional players compounds the existing liquidation risks identified by analysts, keeping Bitcoin exposed to further downside over the coming days despite some optimism building around potential broader rally prospects.
Bitcoin's spot market netflow shows -$412 million over the past 30 days, marking net accumulation as coins left exchanges but remaining modest by market standards. As reported by AMBCrypto, the netflow peaked at only -$1.10 billion over 50 days, indicating thin appetite for buying Bitcoin. Over the past 15 days, Bitcoin netflows totaled $182 million in sell-offs, with negative netflows indicating net buying as coins move off exchanges. This minimal accumulation signals weak demand conditions absent during genuine bull-run conditions, creating a dynamic that supports Wedson's cautionary outlook.
Technically, Bitcoin remains in recovery mode rather than a verified uptrend, currently trading near its 50-day and 100-day moving averages which show buyers and sellers in balance. The 200-day moving average, significantly above current prices, is still sloping downward toward $73,000, indicating longer-term market structure still favors caution. The Relative Strength Index is close to the neutral 50 mark, making Bitcoin susceptible to whichever side produces higher volume first. Bulls' immediate goal is to regain resistance around the 200-day moving average and break above $67,000, while a failure to maintain current consolidation could see Bitcoin return to support around $60,000.
