Cascading Liquidation Reaction

The "doomday" candlestick that appears on the Bitcoin chart is indeed spreading panic among cryptocurrency holders. The article states that this is not just a simple sell-off: the driving factors also include a $5.7 billion decline in the futures market, while the spot market also saw increased trading volume, with a $438 million decline.

Since November 11th, Bitcoin has fallen by approximately 9%, reaching a low of $67,449.

Cascading Liquidation Reaction

In this case, the common explanation is usually a series of liquidations triggered by some factor. The article argues that considering that this decline was accompanied by liquidations amounting to $1.65 billion, it is not surprising that both the spot and futures markets fluctuated simultaneously and triggered a sell-off.

According to the data from the analysis platform CoinGlass, within the past 24 hours, a total of 187,171 traders across various exchanges were liquidated. Among them, the amount liquidated from long positions was 1.46 billion US dollars, while the amount liquidated from short positions was only 183 million US dollars.

Among them, Bitcoin had the largest settlement volume, totaling 918.6 million US dollars, with long positions accounting for 95.4%. The largest single settlement occurred on Hyperliquid, which was a long position in BTC-USD worth 31 million US dollars.

Kinetic energy is on the decline.

The article states that the price of Bitcoin has fallen below the $70,000 mark and is currently trading around $68,000. Considering various momentum indicators, there doesn't seem to be much room for further decline.

This is the first time since August that Bitcoin has fallen below $70,000. From a momentum perspective, RSI is approaching 30, close to the oversold area.

But where will Bitcoin ultimately stabilize? The article suggests that, realistically, the recent "reasonable" support level is around $64,000, which is also the starting point of the upward trend in August.

The article also states that this round of decline in the crypto market occurred against the backdrop of widespread risk aversion in the tech, AI, and cryptocurrency markets. In addition to the turmoil in the crypto market, the entire tech industry has also been impacted by reports that Jensen Huang will be leaving NVIDIA.

At the end of the article, it is mentioned that investors may feel uneasy about the rapid decline in funds in high-risk markets. Worse still, the overall market environment is not currently favorable for bulls; therefore, it might be wiser to prepare for a longer-lasting adjustment period.