Bitcoin (BTC) price has slipped below key trend line, suggesting the end to the short-term consoldiation. This drop signals the start of a correction and is likely to take BTC much lower before a recovery rally emerges. Let’s take a look at technicals, futures data and on-chain metrics to see what Bitcoin might do next. Before we step into any aspect of our analysis, let’s explore why Bitcoin crashed. Explaining December 9 Crypto Market Crash: A $1.7 Billion Liquidation Event During a raging bull run, the leverage present in the ecosystem climbs higher. This is true even in the traditional markets. With cryptocurrencies, this is dialied up to an eleven. As a result, when Bitcoin price slide 6% on late Monday, it caused altcoins to hemmorhage, triggering a flurry of liquidations due to the massive leverage. As a result of this cascade, the total liquidation reached a whopping $1.7 billion, according to data from CoinGlass . Crypto Market Liquidations Hit $1.7B on December 9 The leverage is one of the key drivers of such a massive crash and liquidation event. However, Google’s announcement of Willow, a quantum chip, could have also added some tailwind to the crash, some speculate. While Google’s new chip has made a huge step in advancing quantum chips, it is still far away from being a threat to Bitcoin’s encryption. Kevin Rose, former Google employee added, “Google’s Willow chip, while a significant advancement, comprises 105 qubits. We have a ways to go… Nonetheless, this is a remarkable leap forward in quantum computing” Bitcoin Price Analysis: Will BTC Recover? Bitcoin’s four-week upsloping consolidation ended on December 9 after a 6.35% crash. This crash, albiet small, breached the inclined trend line, signaling an end to the consolidation and a potential start to the downtrend. Currently, BTC sits on the $97,205 support level, a breakdown of which could trigger a crash to $94,875 and $92,514 support levels. While BTC has ended the four-week consoldiation, it is sitll bullish on the short-term. Howerver, a breakdown of $92,514 would flip this bias favoring bears. Regardless, investors need to keep a close eye on $90K, a key psychological level. A bounce here could trigger a recovery rally, but a failure from bulls to defend this level could trigger a steep correction to $86,621 So, will BTC recover? If the $90k to $92.5k support levels hold, Bitcoin price should kickstart a recovery rally. BTC/USDT 4-hour chart The Open Interest data shows a decline from $65 billion on December 5 to $60 billion as of December 9. If the OI does not pick up moderately, then recovery bounce is unlikely to sustain. BTC Open Interest The 30-day Market Value to Realized Value (MVRV) indicator shows that it is close to zero, suggesting that there are no unrealized profits. While this is a positive sign, it is not a great time to buy yet or expect a recovery. When the 30-day MVRV indicator dips to 6% to 13%, BTC price has reversed. BTC 30-day MVRV Hence, the Bitcoin price prediction hints that a short-term recovery is highly unlikely. The data from price chart, open interest, and on-chain metrics all suggest a similar hesitation – a BTC bounce here is not welcome. That said, investors need to be cautious not to FOMO as some altcoins are likely going to fly. The post Will Bitcoin Price Recover After $1.7 Billion Liquidation Event? appeared first on CoinGape .
