Bitcoin ( BTC ) rebounded to close to $50,000 on Dec. 5 as traders continued to assess recent events.
fresh out of a drop to $41,900 in the Early Saturday, the pair stabilized as the market digested what was the latest giant deleveraging event to hit Bitcoin this year.
TLDR of what happened last night: contracts in
Opens being built for weeks + a positive funding regime and low weekend liquidity (meaning narrow order books) gave a perfect storm to a long winding cascade.
These forced sales run on thin books hence the loot.
– Will Clemente (@WClementeIII) December 4, 2021
For some, however, there was every reason to be cautious and not discount another wave of long-term casualties.
“We dived once more. CT loses its temper and sells more. But it’s miraculously bought,” predicted Lex Moskovski, CIO of Moskovski Capital, in part from comments on Bitcoin’s prospects.
“Consolidation, a slow move.”
That slowdown now has no shortage of significant support levels to recapture: $50,000 and the $1 trillion market cap zone just above $53,000, as well as several previous all-time levels.
Meanwhile, broker and analyst Rekt Capital considered the 200-day exponential moving average (MME), a support line that has held since August but was breached in Saturday’s decline, as a potential line in the sand.
– Rekt Capital (@rektcapital) December 5, 2021
In late September, when the BTC/USD was last traded at the $42,000 level, it similarly saw a test of the 200EMA, and Rekt Capital noted that the severity of the decline is still small compared to earlier ones in history.
“You survived the Bear Market of -84.5% BTC. You survived the -63% $ BTC crash in March 2020. You survived the -53% BTC crash in May 2021. You will survive this crash too.” , added .
A look at the status quo in derivatives markets showed financing fees neutral or slightly negative at the time of this writing, a marked difference from just a few days ago.
A significant portion of open futures contracts were eliminated during deleveraging, and more than $2.5 billion in cryptographic accounts were liquidated.
The question for commentators now was whether enough of the foam had been removed to ensure a steady return to growth.
Has Open Interest released enough? pic.twitter.com/jnvrqRPDot
– Nunya Bizniz (@Pladizow) December 4, 2021
The weekly close, however, looked set to be Bitcoin’s lowest since early October.
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