Market updated - Tuesday 16 November
With Bitcoin falling 8% on Tuesdays to a $60,000 price point, over $890M of leveraged positions have been liquidated. $284M of these positions were in Bitcoin closely followed by $221M in Ethereum. With a parabolic rally anticipated widely amongst the market, however, it seems that the price action is rather resulting in a systematic retest back down to a 20-week moving average. Bitcoin became a little overextended and this may well be the last shakeout of leveraged positions before a subsequent rally. BTC is now down 12% from the previous all-time high.
According to Plan B's stock to flow model we could be looking at a $98k + Bitcoin by the end of November. Despite today's dip, it could still be convincingly argued that Bitcoin remains in an uptrend with market cycle top looking more and more like it will be delayed beyond previously anticipated to Q1 or even Q2 of 2022.
Events like today are common in the crypto space as we all know, however it serves as a reminder of the risks of leveraged trading. Be prepared for an upcoming buying opportunity to accumulate around the $50 mark should BTC continue this micro downtrend.
That being said, it seems to be more apparent that the market remains in a bull cycle and we haven't yet seen the top. Remember the longer that we trade sideways, the more likely and a parabolic rally is and the more 'juice' there will be carried up way past all-time highs.
It does seem that history is rhyming with previous patterns of liquidation cycles:
- BTC is overextended
- Retail goes long into leveraged positions
- The Smart money sells to liquidate retail
- The Smart money picks up their discounted BTC
- Seeing the downward trend, retail go short with leverage
- Smart money goes long
- Retail gets liquidated again
- Rinse and repeat.
Avoid getting rinsed. Leverage with caution and don't be greedy!
Nothing in the article is financial advice.
