Abstract:
Cryptocurrencies fell sharply over the weekend, with Bitcoin falling to a three-month low above $63,000 and a large number of leveraged long positions being liquidated. The largest digital asset fell 5.7% during the U.S. session on Saturday and continued to fall during the Asian trading session on Sunday, hitting a low of $63,311 and falling another 1.7%, hitting its lowest level since August 17. Ethereum, the second largest cryptocurrency, fell 8% during the U.S. session, falling to $1,731 on Sunday, the lowest since July 9.
Rich Rosenblum, co-founder of cryptocurrency market maker GSR, said: "I think this is a technical situation. Bitcoin fell below the 200-day moving average of about $73,000, triggering large-scale liquidation and spawning new short positions."
In recent weeks, multiple factors have compounded, and cryptocurrencies have continued to be under pressure: market expectations for interest rates to remain high, substantial outflows of U.S. spot Bitcoin ETF funds, risk aversion brought about by the ebbing AI market, and the subsequent impact of the $6 billion theft incident from Binance.
Since October 21, Bitcoin has fallen by approximately 25%. Its low for the year was $57,742 hit on July 1.
Large-scale liquidations of over US$500 million in a single day are becoming increasingly common in the market, and violent fluctuations are constantly driving away leveraged traders.
Coinglass data shows that the drop in Bitcoin on Friday triggered the liquidation of approximately US$1.3 billion in cryptocurrency long positions within 24 hours, of which Bitcoin positions accounted for the vast majority.
In the 24 hours as of 7 a.m. on Sunday, Singapore time, the exchanges tracked by Coinglass recorded a total of approximately US$1.9 billion in cryptocurrency liquidation, including US$684 million in Bitcoin and US$466 million in Ethereum. Almost all of the liquidation subjects were bulls.
From October 30 to November 13, the US listed spot Bitcoin ETF had a net outflow of nearly US$3 billion.
Rosenblum believes that Bitcoin may be close to the bottom of technical support. "In the past year, Bitcoin has received support near or slightly below the current price many times, and we are approaching the lower edge of the long-term trend channel."
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