Bitcoin price has quickly recovered above the important psychological level of $100,000, after dropping sharply to $90,500 on December 5. Although it is still 3.3% lower than the All-Time-High of $104,600, Bit has increased by 2.5% during the day, maintaining its upward momentum as the price stabilizes above the exponential moving averages (EMA) on the 4-hour chart.
Within just one hour of strong volatility, over $400 million in cryptocurrency positions were liquidated, bringing the total liquidation value for the day to $1.1 billion, marking the largest liquidation event since 2021. However, a notable positive point is that the funding rate based on the open interest (OI) has been reset, dropping from 0.09% on December 4 to 0.01% on December 6.
Analyst Byzantine General noted that the sharp drop in funding rate, along with the decline in aggregate OI, indicates that the leverage in the futures market has decreased significantly.
"If Bit continues to rise after this liquidation, that would be truly remarkable. Then, nothing can stop the train that is charging forward."
On the daily chart, Bit has formed a bearish spinning top candlestick pattern - a sign of indecision as both buyers and sellers are unable to dominate the market. According to Charles Edwards, founder of Capriole Fund, this is "normal" for Bit whenever the price breaks through important levels like $1,000 and $10,000 in the past.
Similar patterns have appeared in December 2017 when Bit broke through $10,000, as well as when the price crossed $1,000, all leading to short-term volatility but not disrupting the long-term uptrend.
Based on Fibonacci extensions, the short-term target for Bit is $115,000, corresponding to a 15% increase from $100,000. If the Relative Strength Index (RSI) remains below the overbought zone, the price could continue to break out, reaching $124,500 - more than three times the $90,500 Dip low established in the recent correction.
Despite facing strong volatility, Bit maintains its long-term growth trend. The $100,000 level is not only an important psychological milestone, but also a launchpad for higher targets in the current price cycle.
Disclaimer: This article is for informational purposes only and not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions.
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Annie
According to Cointelegraph
