Bitcoin, Ethereum, Dogecoin Surge As 162M Shorts Wiped Out In A Day: Analyst Says King Crypto May Slide Back To $38K Before Continuing Upward Trajectory

Major cryptocurrencies surged on Tuesday evening, marking the first significant rally since early April 2022. This surge was bolstered by the declining interest rates and a growing anticipation for a spot Bitcoin exchange-traded fund in the U.S.

What Happened: BTC experienced a significant rise today, starting below $42,000 and reaching a session high of $44,400. Although it has slightly decreased from those gains and currently stands around $43,800, it still reflects a surge of almost 5% within the past 24 hours.

Data from Glassnode reveals that a significant amount of leveraged derivatives trading positions, mainly shorts betting on lower prices, were liquidated, amounting to $162 million.

Over the last 24 hours, a staggering 79,368 traders experienced liquidation, resulting in a total liquidation amount of $246.65 million. Notably, the largest single liquidation order occurred on OKX, with a BTC-USDT-SWAP value of $8.86 million.

In relation to BTC, over $92 million worth of shorts were eliminated within just one day.

Top Gainer (24 Hour)

The global crypto market cap has reached $1.60 trillion, marking a 3.56% increase in the last 24 hours.

Stocks rebounded from session lows on Tuesday after the U.S. 10-year Treasury yield dipped below the significant 4.2% level, prompted by data indicating a slowdown in the labor market. The Dow Jones Industrial Average and the S&P 500 experienced a slight retreat as the previous rally on Wall Street lost momentum. The 30-stock Dow declined by 0.22%, or 79.88 points, closing at 36,124.56. Similarly, the S&P 500 saw a marginal decrease of 0.06%, settling at 4,567.18. However, the tech-heavy Nasdaq Composite managed to outperform with a gain of 0.31%, reaching 14,229.91.

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Analyst Notes: Cryptocurrency analyst Michael Van de Poppe believes that Ethereum is exhibiting strong potential with a potential breakout above $2,150. "A retest would be a golden entry, but further we’ll be looking at $3,100 for the coming months."

Eli Taranto, Executive Director at EQI Bank, in a note seen by Benzinga, said, "As the European market rally stalls, and China's credit rating has seen a cut by Moody's, BTC  seems to be holding previous gains amid similar optimistic numbers released today, that show DeFi is making a comeback as the market rebounds to $50bn. "

He added, "There is, however, increased risk of profit-taking. Further pressures are expected around US labor market data, which may trigger waning optimism that will reflect on the overall price of BTC.  An interesting note however is that Coinbase has surged 300% since the beginning of 2023 which may suggest investor confidence in players that are most integrated in the traditional financial system – signaling overall sentiment that crypto will flourish where compliance is key. Before continuing its upwards trajectory, BTC may slide back to within $38,000."

Crypto analyst Benjamin Cowen predicts that Bitcoin may experience a dip if it reaches the $48,000 level. Cowen bases his prediction on the use of Fibonacci retracement levels, a technique in technical analysis that helps identify an asset’s support and resistance areas.

"We can always look just in the context of history to see how far this one went from December 2017. If you look at the retracement tool, and you can see over here in the middle of 2019 what essentially happened is that we had weekly closes around the 0.50 Fibonacci retracement with wicks up to around the 0.618. If you take it from here in November 2021, you can see that the 0.50 Fibonacci level is around $42,000. The 0.618 Fibonacci level is all the way up at $48,000. So that gives you an idea of where it would have to go if it were going to emulate what we saw over here in the middle of 2019."

Data from LunarCrush reveals that Bitcoin has experienced a significant increase in social dominance, surpassing 35% in the last 24 hours. Similarly, Ethereum has risen by 33% in terms of social dominance. The social dominance score accurately measures the “share of voice” across various social media platforms.

Photo by Wit Olszewski on Shutterstock

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