Bitcoin (BTC) price analysis: BitMEX long liquidation may be behind BTC/USD collapse

A critical resistance of $10,000 is still out of reach.
A massive long position liquidated on BitMEX, might have caused the strong bearish move on the spot market.

Tanya Abrosimova Independent Analyst

Bitcoin (BTC) managed to recover from the recent low of $9,112 touched during a sharp sell-off on Sunday. BTC/USD is changing hands at $9,643, having gained about 1.6% on a day-on-day basis. Despite the recovery, the first digital coin is still significantly lower on a week-on-week basis (-9%).

Meanwhile, some experts believe that BitMEX might be behind Bitcoin's Sunday collapse. As the stats data shows, the sell-off coincided with the liquidation of a massive long position worth of $100 million on BitMEX. As BitMEX supports trading with 1X100 leverage, the effect of the sell-off was multiplied accordingly.

The industry experts have already noticed that the trading platform developments influence Bitcoin price movements.

"Bitcoin down as @BitMEXResearch unwinds highly leveraged positions. When I interviewed CryptoHayes he said the avg. leverage (on a scale of 0-100x) was 20. Extrapolating that number, adding recent outflow data, and you get a (temporary) inferred BTC price of $8,800 - $9,300," Max Keiser noted recently in his Twitter.

Bitcoin's technical picture

Meanwhile, BTC/USD recovery is capped by $9,750. This barrier is strengthened by SMA100 (Simple Moving Average) 1-hour. Once it is out of the way, the upside is likely to gain traction with the next focus on psychological $10,000 with SMA200 1-hour located on approach.

On the downside, a sustainable move below $9,500 (SMA50 1-hour, the middle line of 1-hour Bollinger Band will push the price towards the initial support of $9,400(the lower edge of 1-hour Bollinger Band) and towards the recent low of $9,112.