Bitcoin price prediction: Liquidation of $340 million worth of positions contributed to BTC's collapse
Bitcoin price prediction: Liquidation of $340 million worth of positions contributed to BTC's collapse
On Thursday, Bitcoin failed to break through the $38,000 level and plunged to $35,500. Friday's trading session of the first cryptocurrency began with the recovery of losses and rose above $36,000.
Experts explained the new collapse of Bitcoin by the fact that a lot of sell orders were probably near $38,000. As BTC approached this level, sell orders took the initiative and sent the price down, which caused the liquidation of long leveraged positions, causing the price to fall further.
The latest data from CoinGlass shows that between November 14 and November 16, when the biggest swings in the cryptocurrency market occurred, $340 million worth of leveraged positions were liquidated, hitting derivatives traders hard.
Another negative factor for BTC was that on Wednesday, the U.S. Securities and Exchange Commission (SEC) delayed a decision on HashDex's application for a spot Bitcoin ETF. This means that the SEC is unlikely to approve any spot Bitcoin ETF applications this year.
Nevertheless, crypto analysts point out that price swings between $38,000 and $36,000 are profitable for traders, but for medium- and long-term investors, they merely represent a market downturn or consolidation that favors a rise toward $40,000.
Another factor in favor of Bitcoin's continued growth is its high network activity.
According to IntoTheBlock, the number of active Bitcoin addresses per day has surpassed 960,000, indicating its complete dominance in the cryptocurrency market.
According to CoinMarketCap, the total cryptocurrency market capitalization has reached $1.41 trillion, with BTC accounting for 50.9% of the total.
BTC is currently trading at $36,289.92.
If Bitcoin continues to rise and consolidates above $37,000, it could continue its bullish trend and test resistance at the 37,500 level, breaking through which will give it strong momentum for another move towards the $38,000 mark.
However, if Bitcoin fails to rise above $37,000, it could fall to support at $36,000, a break of which would see it continue to fall to $35,500 and below.
Read also: Coinbase cuts investments in crypto startups.
