On November 22nd, Bitcoin (BTC) reached an all-time high of $99,609, but subsequent to this milestone, the price declined by 8.2% over four days. This correction led to $250 million in liquidations of bullish leveraged positions. However, despite the significant pullback, key metrics remain within bearish territory.
Understanding the Correction
To put the recent price decline into perspective, it’s essential to examine the magnitude of previous corrections. Between November 9th and November 13th, Bitcoin’s price surged by an impressive 22.6%. This sudden increase led to $342 million in buyer liquidations through BTC futures contracts, as indicated by the purple zone.
The latest correction may not necessarily signal a trend reversal but rather reflects temporary excessive leverage among derivatives traders. To assess whether the inability to breach the $100,000 psychological threshold affected investor sentiment, we need to evaluate Bitcoin miners’ activity.
Bitcoin Miners’ Net Position Change
These entities collectively hold approximately 1.8 million BTC—valued at over $166.3 billion—and are responsible for releasing 3.125 BTC per mined block. Recent data reveals that miners have been reducing their Bitcoin positions at a rate of approximately 2,500 BTC per day, equivalent to $231 million.
In contrast, US spot exchange-traded funds (ETFs) recorded an average daily inflow of $670 million between November 18th and November 22nd. While some might attribute the failure to surpass the $100,000 level to miner selling, this explanation appears insufficient.
MicroStrategy’s Robust Institutional Demand
Notably, MicroStrategy announced a $5.4 billion Bitcoin acquisition on November 25th, demonstrating robust institutional demand. This strategic move further bolsters market confidence and suggests that investors are eager to capitalize on the growing adoption of cryptocurrencies.
Long-term holders have also contributed to selling pressure. Historical patterns show similar behavior in late March, following multiple failed attempts to breach the $73,500 mark. Profit-taking by some whales triggered a two-month correction, culminating in Bitcoin hitting a low of $60,830 on May 1st.
Is the Bitcoin Bottom at $82,500?
If historical trends hold, Bitcoin’s price may bottom around $82,500—a standard 17% correction from its all-time high and far from signaling a bear market. In comparison, during the correction between March 14th and May 16th, US spot Bitcoin ETF holdings showed little change, and MicroStrategy made a single purchase of 24,400 BTC.
This time, the landscape differs significantly. Spot ETF buying remains strong, with additional institutional players mirroring MicroStrategy’s approach. Among these are Japan’s MetaPlanet, Semler Scientific in the US, and Marathon Digital, a leading global Bitcoin miner.
Growing Corporate Adoption
The coordinated activity among these entities suggests growing corporate adoption, which could provide a solid support level for Bitcoin’s price. Although it is uncertain whether these entities will maintain their Bitcoin acquisition pace, the fact that Microsoft shareholders are reportedly debating a similar strategy further bolsters market confidence.
Options Market Resilience
Data from the options market underscores this resilience. The bullish sentiment observed between November 16th and November 26th has faded, as put (sell) and call (buy) options now trade at similar premiums, indicating a shift to neutral sentiment. However, on-chain metrics and derivatives show no signs of stress or indication of a looming bear market, pointing to a bullish price outlook for Bitcoin.
Conclusion
The recent 8.2% pullback may not necessarily signal a trend reversal but rather reflects temporary excessive leverage among derivatives traders. As we move forward, it is essential to monitor key metrics and evaluate the robust institutional demand that continues to drive market confidence.
This article is for general information purposes only and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Appendix
- Bitcoin futures aggregate liquidation, USD. Source: CoinGlass
- Bitcoin miners’ net position change, BTC. Source: Glassnode
- Long-term (5+ months) net position change, BTC. Source: Glassnode
- Bitcoin 1-month options 25% delta skew (put-call) at Deribit. Source: Laevitas
