Holiday Crypto Dip & Reversal; Strong Week Ahead After Leveraged Longs Rinsed Out
The cryptocurrency market is already recovering fast after the weekend dip.
Late Sunday or early Monday, the price of Bitcoin went down to about $45,700 level not long after hitting a new all-time high at nearly $50,000.
Already, BTC/USD has traded above $48k and is now back to targeting the ATH.
Bitcoin’s losses came despite the dollar keeping near two-week lows on disappointing employment data and looking for evidence that the US rebound would outpace the economies of other major countries.
However, many financial markets are out in the United States for Presidents’ Day, and in Asia, the markets remain closed for Lunar New Year.
The prominent reason for the dips has been simple, according to trader and economist Alex Kruger, which is also the only bearish thing, “degen longs abusing leverage.”
This can be seen in the almost $1.9 billion liquidated in the last 24 hours, as per Bybt. Among the 303,349 traders liquidated, the largest single liquidation order happened on Huobi-BTC, valued at $21.25 million, and the highest liquidated amount on Binance at nearly $1 billion.
Interestingly, only $582 million of it belongs to Bitcoin liquidations, the majority of them long.
Most of the liquidations belong to altcoins that include not only Ethereum but DeFi coins, including the likes of AAVE, CRV, UNI, 1INCH, BAL, and COMP.
And this is why Kruger is bullish on the risky assets this week noting,
“I expect a strong week across risk asset and crypto assets. Crypto needed leveraged longs to get rinsed out. We just got that.”
In tandem with Bitcoin, the rest of the cryptocurrency market took a fall, with Ether dropping to $1,655 level ETH -1.65% Ethereum / USD ETHUSD $ 2,556.40
-$42.18-1.65% Volume 21.76 b Change -$42.18 Open $2,556.40 Circulating 116.94 m Market Cap 298.94 b 1 d MSTR Stocks Are A “Leverage Long” Bet on Bitcoin, says MicroStrategy CEO Michael Saylor 1 d Bitcoin and Ether Print Green Candles for 10 Consecutive Days, OI on FTX & CME Rises Sharply & Faster than Binance 2 d Avalanche Launches New Cross-Chain Bridge To Connect Users With Ethereum . While Ether is aiming for $1,800 yet again, the overall market capitalization has recovered half of its $110 billion losses and yet again is on the way to the $1.5 trillion mark.
1% to 4% gains are recorded across the crypto assets, which for some cryptocurrencies goes up to 7%.
As for those, who might see this as the top of the market, the total market cap is only up 1,150% from the March 2020 lows, which are nowhere near the 2017-2018 bull market that resulted in the total market cap increasing by 4,500%.