Quick Read
A wave of liquidations exceeding $1 billion, primarily driven by forced long sales, sparked a market decline that sent Bitcoin and positioned above its 200-day moving average, whereas Ethereum has dipped roughly 1% below this critical threshold, which often serves as a dividing line between bullish and bearish trends.
Alex Kuptsikevich of FxPro anticipates that the market will test the 200-day moving average, identifying it as a primary objective for those holding bearish views.
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This phenomenon, referred to as a liquidation cascade, typically concludes once the surplus of long positions has been cleared. Bitcoin has endured two such events in less than a fortnight, following a $1.3 billion long liquidation that drove the asset to a five-week low on October 30. The modest recovery observed since then suggests that forced selling is tapering off, though fresh capital has yet to enter the market.
Traders are also contending with external pressures beyond the cryptocurrency sector. For example, on November 8, NVIDIA (NASDAQ: NVDA) disclosed that its independent directors would examine reports concerning a foreign intelligence operation directed at its CEO, leading to a roughly 5% decline in the stock during premarket hours. Furthermore, uncertainty regarding how U.S. midterm election outcomes might influence crypto regulation is contributing to a wider downturn across digital assets.
