Crypto rally hits the wall as Bitcoin drops by 4%, liquidates $340mn in 2 days

Highlights

• Bitcoin ran into the wall on 16 November, dipping by over 4% to under $36000.
• The market witnessed a massive sell-off, triggering liquidations of some of Bitcoin’s leveraged long positions.
• At the time of writing, the Bitcoin was trading at $36,569.03 with a 24-hour trading volume of $25,42,31,33,827, according to CoinMarketCap.

Pullback, resistance, price correction. These three words have been hurting the crypto market for over two years. One often hears these three terms, and suddenly, one can think of Bitcoin (BTC) and its price fall. Well, another factor that can lead to price fall is Liquidity.

Yes, Bitcoin ran into the wall on 16 November as it dipped by over 4% to under $36000. As a result, the market saw a $340 million liquidation in just 2 days. Bitcoin was perhaps having the best days of the year so far, as it had notched a new 2023 high on 9 November as it jumped 4.5% in 24 hours to reach $37,200. But then, a familiar sight took over as the market as a wave of sell orders hit the market. As a result, the price soon began to tumble, triggering liquidations of leveraged long positions.

At the time of writing, the Bitcoin was trading at $36,569.03 with a 24-hour trading volume of $25,42,31,33,827, according to CoinMarketCap. The global crypto market cap, too, as a result, dived as it dipped by 2.3% to $1.4 trillion.

Reason for the Bitcoin price drop

The crypto market’s run seems to have been hit by the derivatives traders as they were keen on selling off some of the leveraged positions over the period, according to CoinGlass data. The $340 million liquidation sparked a massive sell-off, thus making BTC more volatile.

Image Credit: CoinGlass

But despite that, market participants believe that BTC price action will witness another rally and the $38000-$40000 range can’t be ruled out. Many believe that BTC ETF could catalyse another BTC price rally.

Will Bitcoin dip further?

As far as the trends are concerned, the market players are still in a sell-off phase. But with Christmas around the corner, the market participants would be hoping that BTC can quickly regain momentum to end the year on a high.

In fact, if you look at the charts, the RSI is indicating a massive sell-off phase is likely to continue for some more time until the rebound phase comes in.

Image credit: Trading View

As of 17 November, the RSI is at 32.07 and showcases a downward slide at the time of writing.

Even the MACD indicator indicates that the signal line (marked in red) is below the MACD line, showcasing that the upward will need some momentum. However, the market participants can take heart from the fact that the Fear and Greed Index still shows greed in the market. The Fear and Greed Index is placed at 63 in yellow, which will increase as the price regains value.

Conclusion

The price dip is a big dent to the bitcoin investors, and many have incurred considerable losses amidst the sell-off. With the bearishness still prevailing, the market participants may head cautiously ahead. How soon Bitcoin can reboot and regain ground remains to be seen, but in a volatile environment, it’s best to stay cautious rather than be sorry.