On November 14th, Bitcoin faced a critical test as it dipped to the $35,000 support level, experiencing a significant drop in price.
In just one hour, the cryptocurrency plummeted by over $1,000, creating a sense of sell-side pressure in the market.
Fortunately, Bitcoin managed to find support at the $35,000 mark, acting as a springboard for a recovery to approximately $35,600 at the time of this report.
This sudden volatility came shortly after what initially seemed like a positive development for Bitcoin and the crypto market, with United States inflation data showing a slowdown beyond expectations.
However, it became evident that beyond smaller retail investors, there was limited enthusiasm for purchasing Bitcoin at its previous levels, which had recently reached 18-month highs.
Analysts pointed out that Bitcoin whales began to cash in on their profits on November 3rd as the BTC price surged from $35,000 to nearly $38,000. Over 15 wallets holding more than 1,000 BTC each either sold or redistributed their holdings.
An accompanying chart from on-chain analytics firm Glassnode revealed that the number of whale wallets had reached its lowest point in about a month.
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Following the release of the inflation data, monitoring resource Material Indicators highlighted the need to anticipate periods of downside movements within the broader Bitcoin uptrend.
They cautioned against assuming that the market would only move upwards, emphasizing that market dynamics are more complex and require patience and conviction from investors.
A subsequent update revealed that bid support had shifted closer to the spot price, moving from $33,000 to $34,500, while whales continued to offload their holdings.
One notable development was the surge in long liquidations, with data from CoinGlass indicating the highest daily volume of long Bitcoin liquidations in several months, totaling $120 million on November 14th.
Interestingly, this amount was nearly equal to the short Bitcoin liquidations that occurred when the price spiked to $38,000 the previous week.
Furthermore, across the cryptocurrency market, long positions in various cryptocurrencies were liquidated, amounting to nearly $300 million.
In conclusion, Bitcoin’s recent price action showcased the cryptocurrency’s ongoing volatility, with fluctuations driven by factors such as profit-taking by whales and market sentiment.
Traders and investors need to exercise caution and be prepared for both upward and downward movements in the ever-evolving cryptocurrency market.
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