These drops shaved more than 4% off the cryptocurrency market capitalization in just one day and triggered the liquidation of more than $1.5 billion in long positions, the largest amount since 2021.
The market of cryptocurrencies falls for the second consecutive day, experiencing strong setbacks. Bitcoin It falls more than 1% in the last 24 hours, reaching US$97,400, after having hit a minimum of US$94,000 on Monday. Meanwhile, Ethereum lost 4.2% to $3,700.
Major altcoins are the most affected with a decline of up to 13% led by Bitcoin Cash, followed by Polkadot (-12.4%), Stellar (-12.1%) and Shiba Inu (-12%).
These drops reduced more than 4% of the cryptocurrency market capitalization in just one day and triggered the liquidation of more than $1.5 billion in long positions, the highest amount since 2021. These forced liquidations, which occur when a trader is unable to meet margin requirements, often signal extremes in the market and could be indicative of an impending trend reversal.
Critical stage for cryptocurrencies
According to 10x Research analysts, the market is in a “critical” stage. They compare the current situation of bitcoin to the “death zone” in mountaineering, where extreme conditions make prolonged survival difficult. Although they do not believe that bitcoin has reached its maximum ceiling, They warn of signs of exhaustion in the market and recommend caution.
Despite having recently surpassed $100,000, bitcoin has operated in a narrow range, which has formed a Doji pattern, characteristic of indecision in the market. This behavior could anticipate a brief period of consolidation before the general trend resumes. However, on-chain metrics and market structure suggest possible additional corrections in December.
Javier Molina, senior analyst, highlights that bitcoin could be being driven by record flows of US$11 billion towards crypto funds in the last monththanks in part to products like the iShares Bitcoin Trust, which facilitate its adoption on Wall Street. Molina advises managing positions strategically, limiting exposure to this asset to 10% of the portfolio, given its volatility.
From a technical perspective, as prices stabilize in search of a new equilibrium, the market could continue in a consolidation phase. Molina concludes that, as long as bitcoin maintains the level of $90,000, the uptrend remains intact.
Source: Ambito
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