Over $409 Million in Long Positions Wiped Out After Bitcoin Slipped Below $95,000

Bitcoin’s journey towards its much-anticipated $100,000 milestone suffered a significant setback as the cryptocurrency tumbled this week, dropping as low as $91,095 on Tuesday and triggering a wave of liquidations

According to Coinglass data, over $409 million in long positions were wiped out, marking a sharp correction in a market that has been riding high on optimism.

This sudden dip coincided with a broader market recalibration following MicroStrategy’s record-breaking $5.4 billion Bitcoin purchase last week. Despite the bullish sentiment such a massive acquisition typically inspires, market analysts suggest the purchase may have inadvertently set the stage for the current pullback.

The liquidation event reflects the fragility of over-leveraged positions in a high-volatility environment. Analysts point out that the market had become “extremely overbought” after the U.S. presidential elections, with excessive leverage fueling unsustainable price levels.

Adding to the selling pressure, CryptoQuant analysts reported that long-term holders offloaded a staggering 728,000 Bitcoin over the past 30 days, the highest sell-off since April. This wave of profit-taking by seasoned investors further underscores the market’s current state of recalibration.

However, CryptoQuant CEO Ki Young Ju emphasized that such corrections are not unusual, even in a parabolic bull run. Drawing parallels to Bitcoin’s price discovery phase in 2021, he reminded traders that pullbacks as steep as 30% have historically punctuated Bitcoin’s ascents. “Just manage your risk and avoid panic selling at local bottoms,” Ju advised, underscoring the long-term bullish narrative.

Adding to the bearish pressure was an unprecedented $438 million outflow from Bitcoin ETFs, which snapped a five-day streak of consistent inflows. This outflow and a shift in implied volatility towards put options indicate that traders are bracing for further downside or a prolonged consolidation phase.

Despite the short-term correction, market experts remain optimistic about Bitcoin’s long-term trajectory. According to Cryptoquant analyst MAC-D, the recent pullback has not reached the profit-taking pressure observed during the cryptocurrency’s previous all-time highs, leaving room for potential upward momentum driven by FOMO (fear of missing out).

“From an on-chain perspective, cycle metrics such as MVRV, NUPL, and Puell Multiple still indicate that Bitcoin is in a bull market with upward potential.” The analyst wrote

He emphasized the importance of identifying major accumulation periods during corrections, with the Short-Term SOPR metric being particularly insightful. On November 21, the Short-Term SOPR reached 1.096, signaling that some short-term investors took profits

“Historical patterns show that when short-term investors sell Bitcoin at a loss, it often leads to a rebound.” He added.

At press time, BTC was trading at $96,090 following a strong recovery on Wednesday, marking a 1.72% gain in the past 24 hours.