On Monday, cryptocurrency prices plunged again, leading to the liquidation of nearly $1 billion in leveraged cryptocurrency positions, which gave new impetus to the large-scale sell-off.
Bitcoin once dropped 8% in New York to $83,824, with a cumulative decline of nearly 30% since early October. Ethereum also once fell 10% to $2,719, having dropped 36% over the past seven weeks. This market downturn has hit smaller, less liquid tokens harder, which are often favored by traders for their higher volatility and superior performance during market rallies. The MarketVector index, which tracks the bottom half of the top 100 digital assets by market capitalization, has fallen nearly 70% this year.
According to data compiled by tracking firm Coinglass, the cryptocurrency market is currently in turmoil after weeks of selling. The sell-off began in early October when about $19 billion in leveraged trades were liquidated due to US President Trump’s threat to raise tariffs, causing the market to fluctuate sharply. Just a few days earlier, Bitcoin had hit a record high of $126,251. The automatic liquidation of cryptocurrency leveraged positions, such as the major event that occurred on October 10th, is sometimes referred to as a liquidation cascade.
Traders use clearing data to assess the leverage levels in the system, understand market risk appetite, and determine whether a market crash has truly eliminated excessive speculation. However, the data they rely on may not be complete. Industry insiders say that exchanges limit the complete clearing data they share, making it difficult for traders to understand the true leverage levels in the system.
At the beginning of December, market risk aversion was on the rise. The biggest concern was the scarcity of capital inflows into Bitcoin exchange-traded funds (ETFs) and the absence of bargain hunting. It is expected that structural resistance will persist this month, with $80,000 seen as the next key support level for Bitcoin.
Bloomberg data shows that the U.S. spot Bitcoin ETF saw only $70 million in inflows last week, while it has experienced about $4.6 billion in outflows over the past month. The majority of the outflow pressure has come from the iShares Bitcoin Trust, which has seen investors withdraw funds for five consecutive weeks, marking the longest consecutive period of outflows since its launch in January 2024.
Technical analysis:
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Gold: Although the price rose above 4260 yesterday, the yellow liquidity area indicated by our plugin still attracted a price pullback. Pay close attention to the long signal after the liquidity near 4200 is cleared today. If 4220/30 is recaptured after the clearance, it is also acceptable to moderately chase the high. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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The Nasdaq: Yesterday, the price rebounded after fluctuating, touching the supply zone near 25,450 and then slightly falling back, but it did not break down. Overall, it remained in a narrow range consolidation at the upper part of the converging range. The reasonable strategy for today should be to buy after a breakout and pullback, and to capture the long signal after a low sweep at the liquidity near 25,000/25,100. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Yesterday, the green zone we alerted through the plugin showed a certain support effect. Meanwhile, after the price reached the yellow zone and swept the liquidity, there were signs of a rebound. For today, we hope for a more definite breakthrough as the signal. Then, we suggest placing a buy limit order when the price retraces. For the exact positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Key economic data and events to focus on today:
18:00 Eurozone November consumer price index preliminary value
21:55 US Redbook Commercial Retail Sales (YoY) Last Week
At 23:00, Federal Reserve Governor Bowman will give testimony before the House Committee.
