Bitcoin has fallen below $93,000, causing liquidations of over $430 million in the futures market. MicroStrategy’s $5.4 billion Bitcoin purchase failed to deliver the expected price increase, raising concerns about market volatility. The market is cautious ahead of economic data from the US and the Fed’s minutes. A strong catalyst is needed for Bitcoin to reach $100,000.
Bitcoin has halted its upward trend by falling below $93,000 in the past 24 hours. This decline led to more than $430 million in liquidations in the futures market. In addition, a five-day streak of net inflows from spot Bitcoin ETFs in the U.S. ended with $438 million in outflows on the first trading day of the week. MicroStrategy shares also lost 4.4 percent in the same period.
This drop in Bitcoin’s price came after MicroStrategy’s record $5.4 billion Bitcoin purchase last week. However, this purchase did not create a permanent rise in the market. The upcoming holiday season in the US and the lack of a strong catalyst to push the market higher caused the $100,000 target to be postponed for now. This situation reinforced concerns among investors about increased volatility. Ethereum is showing a similar decline at $3,327. The increase in ETH’s implied volatility in “put” options compared to “call” options indicates that the market is generally in a downtrend.
According to analysts at QCP Capital, such declines are a natural part of the market’s exit from overbought territory. They see the current pullback as a short-term “breathing” move in the market, noting that Bitcoin has been overbought and leveraged in the post-2024 US presidential election period.
The recent pause in Bitcoin’s rise has caused investors in the cryptocurrency market to take a more cautious stance against short-term risks. Investors are closely monitoring the US Federal Reserve (Fed) FOMC minutes to be released today and the Personal Consumption Expenditures (PCE) data to be released on Wednesday. The impact of these data on the market is a matter of great curiosity. If the data yields different results than expected, pressure on the cryptocurrency market may increase.
Analysts at QCP Capital describe Bitcoin’s current correction as a normal move for the market. However, investors should closely monitor how upcoming economic data and market conditions will affect prices. Stronger catalysts need to come into play for Bitcoin to reach the psychological level of $100,000.
