Will Bitcoin Price Experience Another Crash?
Bitcoin’s price saw a 6% correction recently, following a rise above $91,000. The asset has sustained a pattern of higher highs and lows as long as it stays above $85,000, with analysts forecasting a potential target of $100,000. However, overleveraged conditions in the futures market raise concerns about possible deeper corrections if price stability cannot be maintained.
The recent correction in Bitcoin’s price, which saw a decrease of 6% from November 13 to November 15, has initiated speculation surrounding the possibility of a more significant downturn. This decline followed Bitcoin’s ascent beyond its former all-time high of $73,880, reaching unprecedented levels above $91,000. Notably, despite the retraction, Bitcoin has managed to uphold a pattern of higher highs and higher lows, signifying persistent bullish trends, as long as it remains above the $85,000 threshold on daily charts. The resilience of Bitcoin is evident, evidenced by its continuing higher highs and higher lows on hourly charts, alongside its maintenance above crucial moving averages—namely the 50-day, 100-day, and 200-day measures. This ongoing bullish momentum has persisted since November 5, indicating robust market strength. Analyst Bluntz asserts that the current retracement to $87,000 may represent a final low point before Bitcoin sets its sights on $100,000. A liquidity sweep near $85,500 may reinforce support, potentially fostering further upward movement. Conversely, Bitcoin may encounter challenges in the event it fails to maintain a daily close above $85,000, particularly given the overleveraged conditions within the futures market that elevate the risk of a more pronounced correction. On November 13, CryptoQuant CEO Ki-Young Ju remarked that the estimated futures leverage ratio for Bitcoin/USDT pairs has surged to a new peak of 270%, exceeding prior highs recorded in May 2024. Additionally, record-setting open interest levels reflect a substantial quantity of leveraged positions at stake. The scant historical trading activity above $73,884—a zone where Bitcoin has traded for less than ten days—also results in fragile spot order book support and resistance, compounding the difficulties in ensuring price stability around current levels. Furthermore, research from CoinGlass indicates a significant liquidation zone clustered around $85,750, where leveraged positions totaling over $127 million could face liquidation. This scenario makes a liquidity sweep of the $85,000 level probable, offering a potential groundwork for price recovery should buyers enter the fray. Nonetheless, the precarious market conditions combined with elevated leverage remain critical factors that could exacerbate volatility in the short term. Hence, Bitcoin’s bullish prospects are strongly contingent upon maintaining its position above $85,000. However, the conjunction of overleveraged markets and sparse support above $73,880 amplifies the risk of a deeper market correction. The upcoming days will be pivotal in determining whether Bitcoin stabilizes or experiences further decline.
Bitcoin, the pioneering cryptocurrency, has consistently attracted attention due to its volatility and potential for significant price fluctuations. Recently, the asset witnessed a price surge, establishing a new all-time high, followed by a corrective phase prompting discussions about market sustainability. Technical analyses and indicators, such as moving averages and support/resistance levels, serve as tools for traders to assess potential price movements. The dynamics of overleveraged positions and futures market conditions can impact Bitcoin’s stability, necessitating a thorough examination of current trends and market sentiments to comprehend future prospects.
In conclusion, Bitcoin’s capacity to hold above the critical $85,000 mark will be crucial for maintaining its bullish trajectory. The presence of overleveraged positions in the futures market poses a substantial risk of a deeper price correction, particularly given the thin support levels established previously. As the market evolves, careful monitoring of liquidations and trading volumes will be essential in anticipating Bitcoin’s next moves and overall stability in the near term.
Original Source: www.cryptotimes.io
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