Bitcoin’s price recently experienced a 6% drop between November 13 and 15, marking its first significant correction since surpassing its previous all-time high of $73,880.
Despite this recent pullback, Bitcoin remains in a period of price discovery that began on November 6. The overall bullish momentum could continue if the price maintains support above $85,000 on the daily chart.
Overleveraged Markets Can Trigger Deeper BTC Liquidations
Bitcoin’s decline hasn’t altered its upward trajectory over the longer term. The cryptocurrency has maintained higher highs and higher lows, both on short-term and long-term hourly charts. Since November 5, Bitcoin has stayed above key moving averages (50-day, 100-day, and 200-day EMAs) on the 1-hour chart, reinforcing its bullish position.
For the upward trend to continue, Bitcoin would ideally see a liquidity sweep in the $85,500 range, where its recent higher low lies. Independent analyst Bluntz has suggested that this price range may serve as the final low before Bitcoin surges toward the coveted $100,000 mark.
If Bitcoin fails to close above $85,000, bearish signals may emerge. The futures market shows an alarming increase in leveraged positions, which could amplify the market’s volatility.
CryptoQuant’s CEO, Ki-Young Ju, pointed out that the futures leverage ratio for the Bitcoin/USDT perpetual market has reached a new peak of 270%, surpassing previous highs from May 2024. Additionally, open interest in Bitcoin contracts is at record levels, indicating an unprecedented number of leveraged positions. This growing leverage suggests that the market could experience increased liquidations if prices dip further.
One challenge during Bitcoin’s price discovery phase is the thin order books above the $73,884 price range, where Bitcoin has stayed for less than 10 days. This lack of support and resistance at higher levels raises the possibility of significant price fluctuations.
Data from CoinGlass revealed that the largest liquidation range lies near $85,750, where more than $127 million in leveraged positions could be liquidated. This situation strengthens the argument for a potential liquidity sweep of Bitcoin’s recent lows around the $85,000 mark.
Coinbase Premium Declined by 88% on Nov. 14
After Donald Trump’s election win on November 6, the Coinbase premium index surged to its highest level since April 2024, reflecting strong buying pressure from U.S. retail investors. As Bitcoin achieved its new all-time high, the premium continued to rise, signaling ongoing demand.
However, by November 14, the premium experienced a sharp 88% drop, suggesting that some investors may be taking profits or that the initial wave of spot buying is losing momentum.
Bitcoin futures market analyst Byzantine General also noted that spot bids on exchanges like Coinbase and Kraken continue to play a crucial role in Bitcoin’s bullish momentum. When these bids slow down, Bitcoin often experiences corrections, as seen in the current market environment.
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