A major sell-off wave occurred in cryptocurrencies at the beginning of the week after the opening of Asian markets. Following the wave of sales, the global crypto market value also fell by 5% to $1.57 trillion. While a 7% decrease was experienced in the Bitcoin price, major sales also took place in Ethereum (ETH), XRP, Solana (SOL), Cardano (ADA) DOGE and SHIB, which were the most talked about altcoins in about a month. The “Crypto Fear and Greed Index” fell from 82 to 80, but it is still in the extreme greed zone.
Why Are Cryptocurrencies Falling
Many analysts had predicted a decrease in cryptocurrencies in recent days. Accordingly, there was a correction expectation in the crypto market by traders.
Popular Bitcoin analyst WillyWoo pointed to the price movement in BTC and stated that it is not very common for its price to double in only a 2-month period without a pullback, and that a correction is also normal. Corrections and pullbacks are important for confirming the next rallies that could occur during ‘extreme greed’.
We had pointed out a potential correction this week by referring to CME in recent days. The need to fill the Bitcoin CME Gap at $39,700 before a possible rally was reflected in the charts. In this regard, the BTC price could fall a little more before a rise is triggered. Following this market situation, approximately 5% and 8% of open interest (OI) were liquidated respectively in CME and Binance.
Furthermore, CoinGlass data shows that over $400 million in large liquidations occurred just on December 12th. Within just one hour, $354 in long positions were liquidated.
The largest single liquidation of the day, valued at $8.23 million, took place in OKX’s BTC-USDT-SWAP. Over the course of the day, more than 119,000 traders were liquidated in the last 24 hours.
Bitcoin and Ethereum Prices May Fall Further
According to some analysts, Bitcoin and Ethereum prices are preparing for a new pullback. Depending on traders and whales chasing another buying opportunity near support levels, we could witness a further pullback as trading begins in the U.S.
Popular crypto analyst, Credible Crypto, stated, “As expected, we couldn’t break the 40,000 level”. According to the analyst, a full reset in OI left the bull market structure intact and preparations are being made for a rally that will exceed $50,000. The analyst believes that the BTC price could reach $60,000 in the coming weeks. In addition, he believes that the ETH price could reach $3500.