An Unexpected Reversal
The UK crypto traders were surprised by a sudden drop in bitcoin and other cryptocurrencies, resulting in over $400 million in liquidations. This raises the question for many traders: “Is this the beginning of a typical 30% correction in the crypto market, or just a temporary liquidation event followed by an upward move?”
On the weekend, Bitcoin was steadily trading within a triangle formation. However, at midnight on Monday, the triangle was broken, and within three hours, the price plummeted to $40,450.
Huge Liquidations
According to CoinGlass, more than $400 million in liquidations were triggered on both long and short positions, with longs being hit the hardest. The accumulation of long positions was based on the expectation that Bitcoin would reach $48,000. While this may still happen, the liquidation of leveraged longs has cleared the path to that level.
Higher or Lower?
After the liquidation event, the price retraced to the 0.618 Fibonacci level and is currently consolidating. By the end of Monday, it will become clearer whether the price will continue to consolidate and push higher or if the predicted 30% to 40% correction will still occur.
Hot Take: Uncertain Times for Crypto Traders
Crypto traders in the UK experienced a significant drop in bitcoin and cryptocurrencies, causing substantial liquidations. The sudden reversal has left traders wondering if this signifies the beginning of a major correction or just a temporary market event. Over $400 million was liquidated, primarily affecting long positions, as traders anticipated a bullish move to $48,000. However, this liquidation may have cleared the way for Bitcoin’s upward momentum. The price is currently consolidating near the 0.618 Fibonacci level, and further market movements will determine whether the consolidation continues or if a correction looms.
Source: Trading View
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