Bitcoin and Ethereum Drop As Traders Get Liquidated — Is The Market Headed For a Reversal?
Prices saw 11% decrease indicating rejection. Could this be a start of a larger reversal?
Key Takeaways
- Over $400 million worth of positions liquidated in the last 24 hours across BTC and ETH.
- Bitcoin and Ethereum decreased by 11% as key resistance was reached.
- A Bull market correction might have started.
The price of Bitcoin reached $45,000 on December 5 and stayed there until yesterday, December 10, when it made a downturn. It fell to $40,335 at its lowest point as the week began, marking a decrease of 11%. On the other hand, Ethereum made its yearly high of $2,400 on December 9 after a downturn to $2,145, which is an 11% decrease as well.
Consequently, we saw a larger amount of long positions getting liquidated. According to CoinGlass data, in the past 24 hours, 113,881 traders were liquidated, and the total liquidations came in at $403.96 million.
Most were long positions with $348.62 million compared to only $55.52 million. With the prices getting overextended in the previous period and now seeing significant declines, is this an early sign of market weakness?
BTC Price Analysis
The price of Bitcoin rose by 76% since its September 11 low of around $25,000. This is the start of the ending wave from the larger uptrend that started on November 21 last year.
In our previous analysis, we called for an interaction with the $45,000 area as the next significant resistance, and judging by today’s rejection, it has proven to serve as such. Analyzing the wave structure in the last advancement from November 6, it seems there might be another minor attempt to continue its upward trajectory.
It came slightly short from the interaction with the level, so an upward spike above it would look likely, but it ended as a wick and quickly snapped back below it. The rise ended as it is, and now the first bull phase correction has started.
In any case, this correction will be awaited shortly, and from the current downward movement, we will see if it has already begun. This ABC correction should bring the price of Bitcoin to the $25,000 area optimally but could go lower.
ETH Price Analysis
What’s been said for Bitcoin applies to Ethereum as well. Its price was in an ascending structure from June 18 last year and most likely marked the completion of the leading diagonal, moving upward in a five-wave manner.
December 9 high was an interaction with its ascending resistance level and ended as a rejection, displaying the same behavior as it did on two previous occasions. There could be another minor high ahead, but this chance is slim.
More likely, we saw the completion of this larger uptrend, and it is now headed to its first bull-significant correction. If so, ETH could now be sent to the $1,500 area in an ABC correction or to $1,400 if it reaches its optimal Fibonacci retracement level of 0.618.
Conclusion
The cryptocurrency market has continuously grown since November last year and recovered significantly, showing promising signs of a starting bull market. However, before it can continue sustainably, it must establish higher support and form its first higher low.
These higher lows are the corrections we have outlined in our price chart analysis and are referred to as higher price points compared to the lows of November last year when the larger uptrend started.
As the prices are getting overextended and we are approaching the holiday season, the euphoria might cause the market to continue or attempt to rise for another push, but these corrections are imminent.
Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
