Analyst Says $39K Level Is A ‘Distinct Possibility’ By Benzinga

Benzinga – by Mehab Qureshi, Benzinga Staff Writer.

The major cryptocurrencies displayed a mixed performance on Monday evening as Bitcoin, the largest cryptocurrency in the world, experienced its sharpest daily decline in nearly four months due to a significant leverage wipe-out.

What Happened: During a brief period on Sunday evening, the price of BTC experienced a significant decline, dropping to approximately $40,306.

According to data provided by CoinGlass, a total of 66,551 traders experienced liquidations. The overall value of these liquidations amounts to $236.04 million.It is worth noting that the largest liquidation order occurred on Bitmex, involving the LINK-USD pair with a value of $33.55 million.

For those unfamiliar, the term “liquidations” refers to the forceful closure of a leveraged trading position. This typically occurs when a trader’s available margin to cover the open position has been completely depleted. These instances of large-scale liquidations often indicate a local top or bottom in prices.

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The global crypto market cap has reached $1.58 trillion, marking a 2.80% decrease in the last 24 hours.

The S&P 500 experienced an upward trend on Monday as investors aimed to maintain Wall Street’s positive momentum at the end of the year.Closing at 4,622.44, the S&P 500 index saw a 0.39% increase, marking its highest closing level since March 2022. The Nasdaq Composite also rose by 0.20% to reach 14,432.49.

As we move into the current week, investors are eagerly anticipating key inflation data, which has the potential to influence market movements and impact rate policy decisions from the Federal Reserve. The central bank’s two-day meeting is scheduled to commence on Tuesday.

Regarding significant economic data, Tuesday will see the release of November’s consumer price index reading, while the producer price index is slated for Wednesday. These upcoming data releases are among the final factors that could determine the market’s strength as we approach the end of 2023.

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Analyst Notes: Cryptocurrency analyst Michael Van de Poppe observes that it is crucial for Bitcoin to maintain its levels of $36,500-38,000 on higher time frames. “With this correction, we’ll see bounces coming from $39,500-40,000 back to the $42K+ mark. Bitcoin is likely going to create a new range before the end of the year.”

Crucial levels to hold for #Bitcoin are, on higher timeframes, $36,500-38,000.

With this correction, we’ll see bounces coming from $39,500-40,000 back to the $42K+ mark.#Bitcoin is likely going to create a new range before the end of the year. pic.twitter.com/bmQIREzEW8

— Michaël van de Poppe (@CryptoMichNL) December 11, 2023

Eli Taranto, Executive Director at EQI Bank, in a note seen by Benzinga, said, “The $40K level has been reached and we are likely to see further corrections, as US data is released. BTC is the king but every king is influenced by events at the court, with their own agenda.”

He added, “As traders take profit and the markets wait for the ETF decision, Bitcoin will continue to sway in the wind, affected by every butterfly effect imaginable. $39k is a distinct possibility. “

Crypto analyst Will Clemente, noted that the recent correction shouldn’t have been unexpected and was inevitable. According to Clemente, these pullbacks serve the purpose of reducing excessive leverage and establishing a more sustainable price action.

“BTC just nearly doubled in 2 months with no pullbacks, a correction is not that surprising,” Clemente posted. “Corrections shake out ‘weak hands’ and leverage, allowing for a stronger foundation for eventual moves higher.”

This price action recently has been awesome, but friendly reminder that there will be sharp corrections along the way as the market shakes off greedy leveraged longs.

Can’t go wrong holding spot in cold storage. pic.twitter.com/JvWOE25bNi

— Will (@WClementeIII) December 5, 2023

According to Santiment, a crypto analytics firm, there has been a significant retracement in the crypto markets. Bitcoin’s price has experienced a decrease of 9.8% since reaching its peak on December 8th. Notably, lower-cap altcoins are witnessing particularly sharp declines. Amidst this market volatility, there seems to be a divided sentiment. On one hand, some are advocating for buying the dip, while others are speculating that a bear market is on the horizon.