Bitcoin (BTC) has fallen by as much as 16% to $ 16,334 on November 26, since it peaked at $ 1,484 the previous day. The data indicated that the series windings were the driving force behind the main correction.

Before the withdrawal, open interest in the Bitcoin futures market reached a new full-time high. The derivatives market was also overheated by buyers, causing the market to tilt to one side.

Sizes of BTC futures. Source: Cointelegraph Markets, Data on digital assets.
A combination of two factors led to a rapid drop in the price of BTC along with a sharp increase in futures trading volume.

More than $ 1 billion in futures contracts were liquidated, as it did on March 12th. For example, trading volume on the Chicago Mercantile Exchange was $ 1.8 billion – the highest on record, according to Skew.

What led to a series of liquidations?
When the bitcoin price began to decline, the flow of exchanges rose dramatically. This indicates that whales or high net worth investors are actively selling out on major exchanges, including Coinbase.

Ki Yong Joo, CEO of CryptoQuant, noted that the All Exchanges Inflow Mean shows sales pressure from whales.

Initially, whale sales drove the Bitcoin price down to around $ 18,000. However, due to the fact that there may have been a large number of long indebtedness contracts, this has led to long-term pressures.

In a few hours, the bitcoin price fell to $ 16,334, leading to a similar March crash. The data shows that approximately $ 1.9 billion in futures contracts were settled that day.

According to Glassnode, a market data analyst, Binance Futures saw the largest liquidation increase of $ 425 million in just two hours at 03.00 and 08.00 UTC.

Large price fluctuations were expected after a small initial drawdown mainly due to higher funding rates. Since the beginning of November, the market has been buying BTC for a very long time, which increases the risk of a sharp correction in BTC.

what is happening now?
Order books on major exchanges were destroyed, as a result of which a short-term correction occurred in the cryptocurrency market.

There are three possible scenarios for Bitcoin development in the near future. First, it can reach $ 18,000 relatively quickly. Second, it may continue falling into the next large support area of ​​$ 13,700. Third, it might fluctuate, which would stabilize the derivatives market.

But there is one question related to the math. Glassnode found that the number of bitcoin whales has reached a new high all the time.

This means that there is still a lot of potential sales pressure that can come from wealthy investors. Glassnode analysts said on November 25:

“The number of Bitcoin whales (companies with at least 1,000 BTC) has reached the new ATH after more than 4 years. A device is a set of network addresses controlled by the same person / organization.”

Source: CoinTelegraph

LEAVE A REPLY