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Major cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), and Solana’s SOL have experienced significant volatility at the start of the Asia trading day. 
<a href="https://crypto.ro/en/bitcoin/">Bitcoin</a>, the leading digital currency, saw its value dip as low as 5% over a 24-hour period, trading at $41,300 before slightly recovering to $42,000, according to <a href="https://www.tradingview.com/chart/?symbol=BITSTAMP%3ABTCUSD" rel="nofollow noopener" target="_blank">TradingView</a> data. 
Similarly, Ether plummeted to a low of $2,170 before regaining ground to $2,239, and Solana dropped to $66 before bouncing back to $70. 
<figure id="attachment_25551" aria-describedby="caption-attachment-25551" style="width: 100%" class="wp-caption alignnone">
 <img decoding="async" class="size-full wp-image-25551" src="https://crypto.ro/en/wp-content/uploads/2023/12/Coin360-27.png" alt="Coin performance over the past day" width="1920" height="931" srcset="https://crypto.ro/en/wp-content/uploads/2023/12/Coin360-27.png 1200w, https://crypto.ro/en/wp-content/uploads/2023/12/Coin360-27-300x145.png 300w, https://crypto.ro/en/wp-content/uploads/2023/12/Coin360-27-1024x497.png 1024w, https://crypto.ro/en/wp-content/uploads/2023/12/Coin360-27-768x372.png 768w, https://crypto.ro/en/wp-content/uploads/2023/12/Coin360-27-750x364.png 750w, https://crypto.ro/en/wp-content/uploads/2023/12/Coin360-27-1140x553.png 1140w" sizes="(max-width: 1920px) 100vw, 1920px" title="Bitcoin faces potential correction to $39,700 as overheated market cools 19">
 <figcaption id="caption-attachment-25551" class="wp-caption-text">
 Coin performance over the past day
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</figure> 
In the past 12 hours, over $335 million in liquidations occurred across various cryptocurrencies, as per <a href="https://www.coinglass.com/LiquidationData" rel="nofollow noopener" target="_blank">Coinglass</a> data. This includes a significant $300 million in long positions. Bitcoin and Ether led these liquidations, with $89 million in Bitcoin and $74 million in Ether positions being liquidated. 
<figure id="attachment_25552" aria-describedby="caption-attachment-25552" style="width: 100%" class="wp-caption alignnone">
 <img decoding="async" class="size-full wp-image-25552" src="https://crypto.ro/en/wp-content/uploads/2023/12/photo_2023-12-11_14-13-59.jpg" alt="Liquidations over the past 12 hours" width="1003" height="571" srcset="https://crypto.ro/en/wp-content/uploads/2023/12/photo_2023-12-11_14-13-59.jpg 1003w, https://crypto.ro/en/wp-content/uploads/2023/12/photo_2023-12-11_14-13-59-300x171.jpg 300w, https://crypto.ro/en/wp-content/uploads/2023/12/photo_2023-12-11_14-13-59-768x437.jpg 768w, https://crypto.ro/en/wp-content/uploads/2023/12/photo_2023-12-11_14-13-59-750x427.jpg 750w" sizes="(max-width: 1003px) 100vw, 1003px" title="Bitcoin faces potential correction to $39,700 as overheated market cools 20">
 <figcaption id="caption-attachment-25552" class="wp-caption-text">
 Liquidations over the past 12 hours
 </figcaption>
</figure> 
Lucy Hu, Senior Analyst at Metalpha, suggests that this market correction is a normal part of the profit-taking process, especially as Bitcoin rallied over 70% since October. She also highlighted the importance of the upcoming CPI and U.S. Fed meeting, which could trigger further market corrections. 
On-chain analyst Willy Woo predicts a potential correction in Bitcoin prices down to $39,700, as indicated by the Bitcoin CME Gap. This gap refers to a price jump on the Chicago Mercantile Exchange that often gets filled later, bringing the price back to the gap level. 
Bitcoin’s early Monday fall, aligning with predictions from the options market, brought a cooling effect to the overheated crypto perpetual futures market. 
Perpetuals, futures without expiry dates, have experienced a decrease in funding rates, indicating a less bullish market. These funding rates had spiked to 0.15% last week, signifying an overcrowded market with bullish leverage. 
<figure style="width: 100%" class="wp-caption alignnone">
 <img decoding="async" src="https://www.coindesk.com/resizer/P57GA2An0Fkl_GAfP7Pitkbs_ZI=/560x384/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/TCHHE6WHOJCONIGU7AVWZAWUDY.png" alt="Futures open interest in the past 24 hours" width="560" height="384" title="Bitcoin faces potential correction to $39,700 as overheated market cools 21">
 <figcaption class="wp-caption-text">
 Futures open interest in the past 24 hours
 </figcaption>
</figure> 
The market-wide decline in futures open interest for top cryptocurrencies, including XLM, UNI, LINK, and XMR, suggests a decrease in speculative activities. The market is now witnessing a recalibration as overleveraged traders exit, leading to a decrease in open interest and funding rates. 
Bitcoin’s price dynamics on Dec. 11, which showed a leverage wipeout amid overbought conditions, further underscore the market’s volatility. The cryptocurrency’s daily relative strength index (RSI) indicated an overvalued status, often leading to a market top and increased selling pressure. 
<img decoding="async" src="https://s3.cointelegraph.com/uploads/2023-12/51d1cbdc-e0ce-42c3-b496-f40e05347776.jpg" alt="51d1cbdc e0ce 42c3 b496 f40e05347776" title="Bitcoin faces potential correction to $39,700 as overheated market cools 22"> 
Furthermore, on-chain indicators and Bitcoin miners’ reserves data from CryptoQuant suggest a strong likelihood of profit-taking at current market tops. This is evident from the substantial decline in miners’ BTC holdings and increased flows to crypto exchanges. 
Bitcoin’s price movement coincides with the liquidation of $87 million worth of long positions in the BTC derivatives market, adding to the selling pressure. 
From a technical standpoint, Bitcoin’s current trajectory suggests a consolidation pattern, with potential for a rebound or further decline based on upcoming market conditions and regulatory decisions, such as the outcome of the spot Bitcoin exchange-traded fund by the U.S. Securities and Exchange Commission.

Bitcoin faces potential correction to $39,700 as overheated market cools

crypto.ro global

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