After briefly breaking through the $100,000 mark last night, Bitcoin began to enter a downward fluctuation. BTC first plummeted from the high of $100,421 to about $98,000 at 11 PM last night, and after fluctuating for several hours, it sharply dropped to $94,150 at 5 AM today, with a maximum drop of 6.25%. I looked around and found no negative news, perhaps a large holder sold indiscriminately, during the past 24 hours, $1.73 billion was liquidated across the network, with long positions accounting for $1.56 billion, setting a record for the largest single-day liquidation amount in a bull market.
In this round of decline, Bitcoin did not face many liquidations, with the main explosions occurring in altcoins, which are most favored by retail investors, so this seemingly unexaggerated drop has caused many retail investors to lose their principal; Bitcoin's rebound is now close to $98,000, but altcoins are truly in a dismal state, with many dropping 10% to over 20%, and I have been continuously warning my friends to reduce their altcoin positions and take profits in time.
Today's flash crash is similar to the one on the 6th, both occurring around 5 or 6 AM, with a clear intention of clearing leverage during the Asian trading session, while not giving you a chance to bottom-fish.
This round of the bull market does not have a background of massive liquidity, and the premise of a rally must be that the vehicle is light enough; the market cannot pull itself up with excessive leverage. Bitcoin's stability is due to its lack of need to clear leverage. During this time, the funding rates for altcoins have soared, and after this crash, most funding rates have returned to normal, which is the objective; essentially, it is to clear leverage.
Currently, Ethereum and altcoins have not accelerated, some are still bottoming out, and if, as some say, altcoins need a major pullback again. Would it be reasonable to create a new low for retail investors to bottom-fish?
In summary, today's flash crash essentially cleared leverage, and the effect is significant, the goal has been achieved.
The daily performance of altcoins is actually quite healthy and won't stay at this level for long. The purpose of clearing leverage is to prepare for the accelerated market ahead. In the current stage of the bull market, each pullback represents an opportunity for Ethereum's exchange rate to rise and for Bitcoin's market share to decline further. The bull market is still here, so let's go for it.
With the current drop in altcoins, this morning the spot market could be supplemented a bit. Since 11.5, a daily drop of generally 20% hasn't really occurred. A drop of 20% typically sees a short-term recovery of 6-8%. The past three weeks have consistently seen declines on Mondays and Tuesdays.
Tomorrow's CPI data on Wednesday night should boost the market. Weakness to the extreme will turn strong. Those shorting should gradually enter at 1-3 resistance points above the market price, and not enter near the pinning position. The low point of the pinning is a false break, which represents support, and a normal pullback won't easily reach it. This round of decline can determine the strength of the altcoins you hold:
Extremely strong: 20% pullback, such as SUI, ADA
Strong: 30% pullback, such as RAY
Neutral: 50% pullback, such as ALGO
Weak: 90% pullback, such as TRX, CORE, RSR
The extent of the pullback directly reflects the market's confidence in the token and its ability to resist declines, which is worth paying attention to.
Bitcoin's rise needs further catalysts
With Bitcoin recently experiencing a pullback, FalconX Research Director David Lawant stated that if Bitcoin is to break through the $100,000 mark again and maintain stability above that level, further catalysts are needed.
As for the catalysts for pushing Bitcoin further up, I have gathered current market news and opinions, which can roughly include:
On December 10, Microsoft will review a proposal for investing in Bitcoin;
Starting December 15, the Financial Accounting Standards Board (FASB) will introduce new regulations allowing crypto assets to be listed at fair market value in company financial reports, which will encourage finance departments to include Bitcoin on the balance sheet;
The US Federal Reserve will hold an FOMC interest rate meeting on December 18, which will decide whether to continue lowering interest rates. Currently, the probability of a 25 basis point cut is high, indicating that market liquidity may remain relatively abundant in the future;
The Bank of Japan will announce its benchmark interest rate on December 19, and if it chooses not to raise rates, it may reduce market concerns about the risk of unwinding yen arbitrage;
Continuous net inflow of funds into Bitcoin spot ETFs