As an analyst with over two decades of experience in financial markets, I’ve seen countless cycles and trends, but none quite like this digital gold rush. The recent Bitcoin price dip to under $93,000 is a stark reminder that even the most bullish of assets are not immune to market volatility.
Bitcoin’s attempt to reach $100,000 temporarily halted due to increased selling pressure, causing the price to drop below $93,000. Traders who had bought at higher levels experienced significant losses as a massive $337.6 million worth of crypto positions were liquidated on the buy side during the last 24 hours.
As an analyst, I can observe evidence of sell-offs driven by liquidations in the graph below, which displays volume-vs-price data from prominent centralized exchanges. This data indicates substantial selling activity, particularly on platforms that offer perpetual futures trading.
Instead of just blaming forced liquidations, Glassnode also highlighted long-term Bitcoin holders, specifically those who have held for 6 months to a year, as significant sellers during this period. These holders are selling due to an average cost basis that is about 71% lower than the current market price, which is approximately $57,900.
The situation is intensifying! Long-term Bitcoin holders (LTHs) have been quite active, exerting a significant selling force amounting to approximately -366K Bitcoins per month – the highest since April 2024. However, it’s crucial to explore who these sellers might be:
— glassnode (@glassnode) November 25, 2024
“With Bitcoin surging from $74K to $99K, they capitalized big on the rally.”
In simpler terms, the interaction between buyers and sellers in financial markets is a delicate dance. Today’s market activity showed a shift towards traders choosing to sell rather than buy, moving away from short-term optimism about Bitcoin (BTC). As more trades resulted in selling, Bitcoin’s price fell toward $90,000, causing an increase in short positions. This increase led to a rise in the funding rate for BTC, which went up from 0.019 to a high of 0.04.
Current liquidation map indications imply that if Bitcoin’s price falls below $94,000, it could trigger another round of compulsory selling down to approximately $90,000. Some traders have expressed interest in purchasing at this level.
21st day of the BTC cycle: Typically, we see a good opportunity to rebound and continue the upward trend when it returns to the 10-day moving average. However, if there’s no bounce here, we might expect the midpoint (around the next 7-10 days) to be around $86-$88k due to the usual weakness at this stage.
— Bob Loukas 🗽 (@BobLoukas) November 25, 2024
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2024-11-26 01:51