Bitcoin price analysis points to “spoofing” as the cause behind a sharp $4,000 correction within hours.
Bitcoin Spoofing Triggers Price Collapse
Data from Cointelegraph Markets Pro and TradingView revealed that BTC/USD slipped below $98,000, erasing gains from the previous day. This sudden decline coincided with the release of the US Job Openings and Labor Turnover Survey (JOLTS) data, which highlighted an uptick in job creation and labor market strength.
Macro Factors and Market Reactions
“Market catalyzed lower on JOLTS rising; however, without initial jobless claims going up, a rising JOLTS means one thing — JOB CREATION,” commented Matt Cowart, a popular trader and YouTube channel host, in a post on X.
The Bitcoin market faced pressure as newly placed support levels evaporated under the influence of high-volume traders.
Spoofing and Its Impact on Bitcoin Price Action
Keith Alan, co-founder of Material Indicators, attributed the abrupt price drop to “spoofing,” a strategy where entities with significant capital manipulate order books by creating and removing liquidity.
“Spoofs are annoying, but they do tend to facilitate some predictable price action for Bitcoin,” Alan explained. He shared a BTC/USDT chart on Binance that illustrated the removal of recent liquidity blocks.
Spoofing impacts short-term price movements by creating sudden liquidity shifts above or below the current market price. These tactics contributed to Bitcoin’s sharp price swings.
Liquidation Wipeout Amid Price Correction
Popular trader Skew observed that late long Bitcoin positions were wiped out during the retracement. Data from CoinGlass confirmed that over $30 million in long positions were liquidated in a single hour.
Fellow analyst Rekt Capital noted, “The retest is in progress, and it may be a volatile one. A Daily Close above $101,165 is needed to confirm a successful retest.”
Head and Shoulders Pattern at Risk
The current retracement has raised concerns about invalidating a bearish head-and-shoulders pattern on Bitcoin’s daily chart, with $108,000 previously identified as the peak. Popular trader Cheds Trading expressed caution, stating, “BTC daily now working on a throwback to broken LH/Right shoulder invalidation zone.”
Conclusion
Bitcoin’s volatile price movements remain influenced by macroeconomic data and market manipulation tactics like spoofing. As traders navigate these uncertainties, a successful retest above $101,165 may provide clarity on Bitcoin’s next trajectory. Stay tuned for updates as market dynamics unfold.
