As a seasoned crypto investor with a decade-long journey in this wild and unpredictable market, I have seen my fair share of market volatility and liquidations. The recent rally of Bitcoin to a new all-time high has undeniably added an exhilarating touch to the overall bullish momentum. However, as someone who has weathered numerous crypto winters, I can’t help but feel a twinge of unease amidst this euphoria.
On Monday, Bitcoin‘s price reached a new record high, sparking a bullish trend across the entire cryptocurrency market. This surge was primarily led by Ethereum, Dogecoin, Solana, and others.
Based on recent market statistics, it’s been estimated that over 230,000 crypto traders experienced a forced sale of their positions within the last day, primarily due to short positions. The Bitcoin leveraged market was responsible for approximately $121 million in such forced sales, with the single largest liquidation order taking place on OKX exchange, totaling around $15.56 million.
In the world of crypto, I’ve been keeping a close eye on things, and it seems that Ethereum’s leveraged market took a significant hit in the past day, with over $90 million worth of positions being liquidated. On the other hand, Dogecoin managed to secure a spot among the top three, recording more than $68 million in forced liquidations within the same period.
More Crypto Liquidations Ahead
The Bitcoin market, spurred by Donald Trump’s historic victory and the Fed’s recent interest rate cut, is now moving into a phase where prices are likely to be determined (price discovery). This transition could lead to increased volatility in the crypto market. Additionally, an influx of cash into cryptocurrency investment products, particularly US spot Bitcoin ETFs, has seen a rise in new traders driven by fear of missing out (FOMO).
Nearly $1 billion will be liquidated if #Bitcoin $BTC drops to $77,250!
— Ali (@ali_charts) November 11, 2024
Based on statistics from Coinglass, approximately $1 billion worth of long positions in Bitcoin have been liquidated at a cumulative price drop of around $77,253. In the short term, it’s important to consider the possibility that Bitcoin’s price could dip below $80K once more before any further rally.
As a researcher, I’ve discovered that over 60% of active traders on Binance, the top-tier centralized exchange in terms of registered users and daily trading volume, have taken a bearish stance by opening Bitcoin futures contracts for selling rather than buying.
Looking at a technical perspective, there’s a strong possibility that the price of Bitcoin might surge towards a parabolic trend in the upcoming months. This is because the Weekly Relative Strength Index (RSI) is trying to climb above 70% for the first time since April this year. However, if this doesn’t hold, the Bitcoin price could dip below its current $80K level to retest the latest bullish breakout of its All-Time High (ATH) around $73.7K.
Best Move Ahead
During the most turbulent part of the prolonged bullish trend in the cryptocurrency sector, it’s likely that forced liquidations will sharply increase. Furthermore, there could be a surge of unexpected panic buyers (FOMO traders) as widespread acceptance grows, particularly driven by institutional investors.
With Bitcoin consistently setting new record highs, it’s crucial to practice sound risk management. The market is bound to experience fluctuations, including dips and peaks, so ensure your strategy is resilient enough to weather these changes. Curb your impulse for immediate gains by not overexposing yourself to a single investment. Instead, invest gradually and wisely.
— CZ 🔶 BNB (@cz_binance) November 8, 2024
Consequently, experienced cryptocurrency leader Changpeng Zhao (CZ), co-founder of Binance, encourages investors to use sensible risk management practices. Furthermore, CZ has emphasized that for maximum profit, crypto enthusiasts, or “degen,” should hold onto their digital assets during market uptrends rather than engaging in frequent trading.
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2024-11-11 16:33