The cryptocurrency market experienced a significant downturn on Monday, following a gradual decline over the weekend. Bitcoin (BTC) fell to just above $95,000, marking a 5% decrease within 24 hours, while Ether (ETH) saw a more substantial drop of 10%, settling at $3,590.
This decline triggered the liquidation of over $1.4 billion in leveraged derivatives positions, predominantly from bullish investors, indicating a sharp market correction reminiscent of previous volatility seen earlier in August and last Thursday.
Analysts from 10x Research noted a decrease in trading volumes and profit-taking by long-term holders, suggesting a potential consolidation phase in the market.
Markus Thielen, the firm’s founder, expressed optimism that this phase might be temporary, urging traders to focus on high-conviction positions while avoiding weaker segments as the market dynamics shift.
Additionally, traders in the options market are adjusting their strategies, anticipating sideways price movements through the end of the year. Digital asset hedge fund QCP highlighted that while they maintain a bullish outlook, they expect spot prices to stabilize during the holiday season.
Overall, the current market conditions reflect a cautious approach among traders, emphasizing the importance of strategic positioning in a fluctuating environment.
