The recent liquidation event may not be finished despite already wiping out significant leveraged positions.
Bitcoin News
Bitcoin may face additional downside pressure as remaining leverage in the market could trigger another flush, crypto analyst James Check warned. The recent liquidation event may not be finished despite already wiping out significant leveraged positions.
Check described the recent market meltdown as a 2-sigma long liquidation event that eliminated a chunk of overleveraged traders. A 2-sigma event indicates a price movement two standard deviations from the mean, representing a statistically significant swing.
Most leverage has been cleared from the market, but Check cautioned that the market has an ability to detect final holdouts. He would not be surprised to see a wick into the $70,000 to $80,000 zone to flush remaining leverage pockets.
Bitcoin dropped by over $24,000 in just 10 days, reaching a seven-month low around $82,000 on Nov. 21. The cryptocurrency has shown tentative signs of stabilization after the dramatic sell-off.
Augustine Fan, head of insights at SignalPlus, said that markets are oversold from both sentiment and technical perspectives. Prices are likely to have found local lows, absent any new external factors, he added.
Fan expects prices to range between $82,000 and $92,000, with the next significant support around $78,000. A sustained break below that level would open further downside, though that is not the base-case scenario.
CryptoQuant analyst Carmelo Alemán identified a local bottom that could lead to a sustained rebound. However, the 1,000 to 10,000 BTC whale cohort continues to sell, preventing full confirmation of a trend reversal.
The recovery shows promise, but the end of the bearish phase requires a clear shift in whale behavior. Bitcoin investors await confirmation that distribution pressure has ended before expecting a sustained rally.
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