BTC price nears $40K as as Bitcoin trader eyes return to all-time high
Bitcoin managed to outperform sellers, resulting in the liquidation of $60 million worth of short positions within just two days. During this period, the price of Bitcoin came remarkably close to the $40,000 mark, demonstrating a significant shift in market dynamics. The cryptocurrency's resilience and upward momentum led to the forced closure of short positions, contributing to a surge in buying activity and potentially indicating a bullish trend in the market.
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Bitcoin (BTC) experienced a decline, with its price reaching $39,688, hovering near the $40,000 mark on December 3. This followed weekend gains that reinforced a "strong" uptrend in the market. The cryptocurrency hit new 2023 highs of $39,730, building on momentum from previous days when it surpassed $39,000 for the first time since mid-2022.
Unexpectedly, a sudden surge in Bitcoin and altcoins led to the liquidation of $60 million in short positions. Some analysts suggested that someone initiated a mass liquidation of shorts across various trading pairs, causing a shift in market dynamics. This unexpected turn of events raised questions about Bitcoin's price behavior around the weekly open, particularly regarding a gap between the CME Bitcoin futures closing price and the spot price.
Despite conventional wisdom suggesting that such gaps would be filled, traders, including Daan Crypto Trades, believed that this time might be different, especially during strong trending environments. The weekend move created a gap that might not be closed until weeks later, challenging the traditional approach of trading based on CME futures data.
Around $30 million in BTC shorts were liquidated on both December 1 and December 2, according to data from CoinGlass. As Bitcoin approached the $40,000 mark, market participants focused on bullish signals on longer timeframes. Some commentators, like Alan Tardigrade, noted that BTC/USD had exited a downward channel in place since its November 2021 all-time high, suggesting that Bitcoin was in "All-the-way-UP mode."
BitQuant, another commentator, expressed optimism about Bitcoin's potential to reach new highs before experiencing some correction. This sentiment echoed patterns observed in previous Bitcoin bull markets. In September, BitQuant even made a bold prediction that BTC/USD could surpass its record highs before the next block subsidy halving in April 2024, just four months away.
