Over the weekend, Bitcoin recovered after a drop of more than $2,000 on Saturday, pushing the price down to a three-day low of $95,800, according to data from CoinGecko. This unexpected drop shook the market, leading to a total liquidation value of nearly $500 million. Currently, $BTC is trading at nearly $98,000, marking stability after the short-term shock.
The strong volatility over the weekend pushed long positions to the highest liquidation level in 11 days, exceeding $344 million, while short positions also incurred losses of about $136 million, according to CoinGlass. Despite the market's short-term fluctuations, analysts still expect demand from both retail and institutional investors will not be significantly affected.
According to a note from QCP Capital, 'As demand for Bitcoin remains strong alongside loose monetary policies from central banks globally, prices will continue to be supported as we approach the end of the year.' These factors help maintain investor optimism, even in the context of price fluctuations.
Market confidence is also bolstered by the pro-cryptocurrency policy outlook from President-elect Donald Trump's administration. Trump has committed to advancing a 'crypto agenda,' especially as he prepares to appoint a new head for the U.S. Securities and Exchange Commission (SEC) after Chairman Gary Gensler announced his resignation. Gensler had previously faced significant criticism from the cryptocurrency community for his strict approach to the industry.
During the election campaign, Trump pledged to fire Gensler if he won, which received strong support at the Bitcoin Conference in Nashville. The change in SEC leadership has raised expectations for more cryptocurrency-friendly policies, a factor that has positively impacted not only Bitcoin but also other assets like $XRP . XRP reached a three-year high of $1.59 last week amid rumors that the SEC would withdraw its lawsuit against Ripple Labs.
Additionally, demand for spot Bitcoin ETFs in the U.S. is rising sharply, with BlackRock leading among 11 competitors in terms of capital inflow and trading volume. The derivatives products of this ETF also contribute to price volatility, with most transactions focused on growth expectations in the coming months.
Bitcoin continues to show strength as it maintains its recovery momentum, despite facing significant volatility and enormous liquidation factors in the market.
