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#BVL009: The liquidator comes calling

Swissblock Insights

Aug 22

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Welcome to The Bitcoin Vector Lite 009!

In our last letter in Aug 13, we highlighted that BTC’s move to $125K was driven by short liquidations, not new capital, therefore we expected a rejection of highs into further consolidation. When rallies aren’t backed by real inflows, the downside tends to be ruthless. And that path was what played out.

The rally printed a new all-time high, hitting all our upside targets except $130k. Then tactical traders triggered a chain of long liquidations. Our downside targets at $118k, $116.5k, and $114.5k were all hit, with a week of bearish capital flows providing a tailwind for these long liquidations.

So the question now is—was this just a flush before a fresh leg up? Or is this market still unwinding?

We’re watching closely, let’s dive into the structural changes at play.