Bitcoin News: Bitcoin Rebounds Above $92,000 After Market Dip

With a sharp surge back to $92,000, it seems that Bitcoin is back on track. With this surge came a wave of liquidations of SHORT positions, which were mostly speculative of a further price drawdown. The blow on Monday was devastating to Bitcoin as it slid below $84,000. However, the favoured crypto asset seems to be keeping it together and making the climb back to its once promising price positions.

This is great news for the whole industry, as many thought Bitcoin’s November crash was the beginning of a long bear run. However, some analysts saw this crash as a market correction that closed out most of the speculative positions and cleansed the market. It appears that this analysis is gaining momentum based on the price action of Bitcoin now.

The Quick Recovery to $92,000

In just one day’s timeframe, Bitcoin made an epic comeback. As the asset had crashed below $84,000 on Monday, the glorious comeback came just a day after on Tuesday. This comeback has given Bitcoin some breathing space, and companies like MicroStrategy as well, which have large Bitcoin-pegged stock foundations.

With prices now floating up and above $92,000, the asset has risen over 8% in the last 24 hours. Bitcoin’s revival has generally improved investor confidence. This is evident in the general trend of the crypto market that has seen a fresh confidence in the past 24 hours. Ethereum was even able to outperform Bitcoin and grew by nearly 10% in the 24-hour timeframe.

However, this recovery is without sad news for some speculative traders on the futures and derivatives platforms. These traders had anticipated, or rather, speculated that the crash of the asset was most certain, hence they had many SHORT positions open on high leverage. During Bitcoin’s latest resurgence, these SHORT positions suffered badly as many of them were forcefully liquidated as they were highly leveraged positions.

This proves once again that speculative trading carries much risk with it. Then there is the matter of leverage. Inexperienced retail traders must never use high leverage, as a small market movement against them can result in a total capital loss, as seen during the previous day’s Bitcoin bull run.

Read More: Bitcoin Price Prediction Today: Will BTC Break Above $94k?

Bitcoin Faces Resistance at $97,000

Analysts are hopeful when they say that the latest surge could continue and that Bitcoin could retest the $97,000 resistance. This resistance level has been a major reason why Bitcoin was unable to continue its bull rally once it had fallen below the price point.

Based on what data could be collected from the market, the indicators are showing a positive shift. This is indicative of the fact that the bulls are regaining control of the market. Even though the RSI 35 shows bearish control, Bitcoin has clearly escaped the oversold territory. This immensely helps the supply dynamics, which could bring an end to the swinging volatility and help the market achieve the much-needed stability.

There is, however, a minor but ever-present resistance point at the $93,000 mark. However, as of now, Bitcoin has overcome this resistance point, suggesting a largely positive outlook for the market. There are several resistance points like these, and Bitcoin will have to overcome each of these resistance points if it is to continue its rally towards the $97,000 resistance point.

Liquidations Cross The $400 Million Mark In Just 24 Hours

According to the data sourced from CoinGlass, the broader crypto market suffered losses in liquidations. This amounts to nearly 400 million US dollars worth of positions getting liquidated in a timeframe of 24 hours.

Since the price action was largely positive during this period, most of the liquidations happened for the SHORT positions. There was recently a bigger derivatives flush when the price of Bitcoin had crashed in November; during that time, it was the LONG positions that were liquidated with force.

Around 348 million US dollars worth of short positions were liquidated in the 24-hour Bitcoin bull run. This amounts to nearly 85% of the total liquidations that took place from Monday to Tuesday. This is the data for the broader crypto market and not concentrated on Bitcoin itself. In terms of looking at individual contribution, Bitcoin, Ethereum, and Solana were the top three contributors to the liquidation event.

Conclusion

Short-term traders are wary of the market due to the forced liquidations that have wiped out more than 400 million US dollars in a single day. They are constantly on the lookout for whether or not Bitcoin will lead the charge. If Bitcoin can continue retesting resistance levels and breach them effectively, the next step in the rally could start.

However, the short-term traders are more interested in a floor much lower at $86,000-$88,000. There are rumors in the industry that sudden ETF-driven spikes like these may not last for long. Even though prices are now stabilized at above $92,900, this has amplified the caution since the technical indicators are not that confidence-inspiring as well. What lies ahead for the Bitcoin price curve is something that will unfold in the near future.

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