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The "end of the world" candle printed on the Bitcoin chart is indeed pushing fear into crypto holders. This is not just a sell-off: it was fueled by futures CVD falling by $5.7 billion, while the spot market also saw a spike, with CVD down $438 million.
Since November 11, Bitcoin has lost roughly 9% of its value, with the lowest point at $67,449.
Cascade of liquidations
In cases like this, the usual explanation is a liquidation cascade triggered by one thing or another. Considering that this comes amid $1.65 billion in liquidations, it is no surprise that the spot and futures markets moved in sync and triggered a sell-off.
According to data from the analytical platform CoinGlass, 187,171 traders were liquidated across exchanges over the past 24 hours. Long positions accounted for $1.46 billion, compared with just $183 million in short liquidations.
Bitcoin saw the biggest liquidations, at $918.6 million in total, with longs making up 95.4% of it. The largest single liquidation, a $31 million long on BTC-USD, happened on Hyperliquid.
Momentum is diving
The price invalidated the $70,000 level and now trades around $68,000, with not much room for further decline, considering multiple momentum indicators.
It is the first time Bitcoin has traded below $70,000 since August. From the momentum perspective, RSI is approaching 30, close to the oversold zone.
But where will Bitcoin finally settle? Realistically, the closest "fair" support is the $64,000 price level, where the August rally started.
The crypto market downturn comes amid wide derisking across tech, AI, and cryptocurrency markets. In addition to the crypto turmoil, the tech industry as a whole is shaken by reports of Jensen Huang's exit from NVIDIA.
Investors might feel threatened by the rapid descent of investments pushed into high-risk markets. Even worse, the market in general is not favoring bulls, so bracing for a prolonged correction might be the wise choice.