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The Driving Factor Behind Bitcoin’s Latest Abrupt Drop Below $50,000

This Popular Elliot Wave Trader Predicts Bitcoin’s (BTC) Imminent Drop To $1,760 Before Face-Melting Ascent

Key Takeaways





  • Recent Bitcoin price volatility has been thanks to long position liquidations according to an on-chain analyst.
  • Despite this, market sentiments are “semi-bullish.”
  • Bitcoin price predictions for 2022 are still very optimistic. 




The price of Bitcoin has been fluctuating in the past few days. Within the course of a few hours, the price rose to over $51,700 and abruptly dropped to as low as $48,200.





The driving force of the volatility seems to be emanating from liquidations happening in the derivatives market. According to a Bitcoin on-chain analyst who goes by the moniker “On-Chain College” on Twitter, in the last few hours, the price of Bitcoin has been dropping as long positions get liquidated.





Image
Chart by @OnChainCollege




Bitcoin liquidations data from Coinglass also supports this as it shows that over 75% of liquidations in the 24 hours time frame occurred in the last 12 hours. Out of $94.10 million worth of Bitcoin liquidations on the day, $71.04 million were liquidated in the last 12 hours with 89.5% of them representing long liquidations. 





The price slump hasn’t affected bullish sentiments





Consequent to the liquidations, the price of Bitcoin has dropped around 3.1% in the last 24 hours to be trading at $49,414. 





BTCUSD Chart by TradingView




Regardless of the price drop, market sentiments have continued to remain “semi-bullish” per data from Santiment, a crypto social metrics tracker. According to Santiment, the fact that the circulation of Bitcoin is holding steady with prices under $50,000 is encouraging and implies that it “is remaining at a justifiable level” when compared to its market cap. The metric they use to judge this is the Network Value to Transactions (NVT) Ratio which they utilize to get insight into the fair value of cryptocurrencies.





Image
Data Via Santiment




This is a good thing for the market as it is likely the price will bounce back up even as market sentiments become more bullish. 





Expectations for Bitcoin in the coming year





Despite the recent price volatility of Bitcoin, many crypto experts are still bullish on Bitcoin according to a report from Next Advisor who rounded up the opinions of crypto market analysts. Several of them have revealed that they expect the price of Bitcoin to still surpass $100,000, but have placed varying time frames on when this could happen. The more conservative analysts including Ian Balika, the founder of Token Metrics, and Jurrien Timmer, director of global macro at Fidelity Investments, believe it may take Bitcoin up to 2023 to reach $100,000. 





In contrast, more bullish analysts, like Kate Waltman who is a public accountant, have noted that the price of Bitcoin could reach $100,000 in the first quarter of 2022. Mathew Hyland, a technical analyst is even more optimistic with his expectation that the price will reach $250,000 in January 2022. He believes that the price will cross $100,000 and then advance rapidly to $250k as FOMO kicks in.


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