Bitcoin (BTC) has reached a critical point, falling below $93,000 due to the difficult market conditions in recent days.
According to QCP Asia’s market assessment dated November 26, a total of $430 million worth of long positions were liquidated during this decline.
The decline coincided with spot Bitcoin ETFs recording net outflows of $438 million on Monday, ending a five-day streak of net inflows. MicroStrategy shares also fell 4.4%. The pullback was notable after the company bought a record $5.4 billion worth of Bitcoin last week.
Reasons for the market pullback
Bitcoin’s attempt to reach the psychological $100,000 level has stalled due to the upcoming holidays in the US and the lack of short-term catalysts to support a new price rally. The market is said to be in overbought territory and has been inflated by excessive leverage in the post-election period. This has made it inevitable for Bitcoin to make a natural correction.
At the same time, a similar atmosphere prevails on the Ethereum (ETH) side. Implied volatility shows that the market is focused on possible downside risks, shifting heavily to put options. This indicates that investors are taking a cautious stance in the short-term outlook.
Market uncertainty could be further heightened by tonight’s FOMC meeting minutes and Wednesday’s PCE (Personal Consumption Expenditures) data, which could potentially create further volatility in crypto markets.
Short-term fix or long-term problem?
QCP Asia emphasizes that this pullback is not an extreme correction and that Bitcoin is simply returning to the levels of early last week. Given the intense buying pressure and high leverage in the post-election market, this pause is considered a healthy breathing period for the market.
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