Bears Were Mistaken- Crypto Market Gains $800 Billion in Two Months

Cryptocurrency enthusiasts, both bullish and bearish, have expressed their opinions and adjusted their strategies during a recent seven-month period of slight bearishness. However, the crypto market has defied the bears, adding over $800 billion in market capitalization in just two months, signaling the start of a bull market.

On November 10, Finbold analyzed TradingView's Crypto Total Market Cap Index (TOTAL), which currently stands at $2.667 trillion. After a prolonged seven-month downtrend that saw its lowest point in early September, the crypto market has surged, increasing by over 40% and adding substantial value.

Significant Market Movements

• The most substantial inflow of capital occurred in the last five days, contributing over $465 billion.
• This surge followed a successful test of the previous resistance level, now acting as support, marking a breakout from the downtrend in mid-October during the "Uptober" phenomenon.

Crypto Total Market Cap Index (TOTAL) daily chart. Source: TradingView / Finbold / Vini Barbosa

Caution: Short Squeeze Followed by Long Squeeze

This past weekend saw notable volatility as Bitcoin (BTC) hit a price target of $77,500, as predicted by Finbold. The market experienced nearly $400 million in liquidations across short and long positions within 24 hours.

• Liquidation Breakdown:
  • $290 million from short positions, affecting bearish traders.
  • $105 million from long positions, with Bitcoin experiencing the largest single liquidation of $13.10 million.

Liquidation Heatmap and Total Liquidations in 24 hours. Source: CoinGlass / Finbold

Potential for Bitcoin Retracement

Analyst CrypNuevo, who had previously predicted the price target for Bitcoin, now warns of a possible long squeeze. This would serve as a necessary corrective movement to eliminate the excess of long positions before the market can continue its upward trajectory.

• The analyst noted:

  “Not sure if we’ll revisit the upside box, but I’m feeling pretty confident that we’ll get a (shallow) pullback from around that zone. If we look at the delta liquidations now, longs are at a risky level.”

Future Predictions for Bitcoin

CrypNuevo mentioned the likelihood of a "short squeeze today followed by a long squeeze" but misjudged how high Bitcoin could rise before experiencing a pullback. As the market has accumulated over $36 billion in long liquidations, this represents a shift in trader confidence.

• Current Strategy:
  • CrypNuevo plans to use any pullback as an opportunity to open more long positions, particularly in promising altcoins.
  • Other analysts are also optimistic about altcoins, suggesting Bitcoin's dominance may soon peak and decline.

As traders and investors navigate this volatile landscape, it is crucial to remain cautious and avoid the fear of missing out (FOMO).

FAQ: Crypto Market Surge and Liquidation Events

Q1: What recent trend has the cryptocurrency market experienced?
A1: The cryptocurrency market has seen a significant surge, adding over $800 billion in market capitalization within two months, indicating a potential shift towards a bull market.

Q2: What was the market cap of the cryptocurrency market as of November 10?
A2: As of November 10, the total market capitalization of the cryptocurrency market stood at approximately $2.667 trillion.

Q3: What factors contributed to the recent market surge?
A3: The surge can be attributed to a successful breakout from a downtrend, particularly following a strong performance in mid-October. Additionally, a significant inflow of capital, especially over the last five days, played a crucial role.

Q4: What was the liquidation breakdown during the recent volatility?
A4: In a recent 24-hour period, approximately $400 million in liquidations occurred, with $290 million from short positions and $105 million from long positions. Bitcoin experienced the largest single liquidation of $13.10 million.

Q5: What is a short squeeze and a long squeeze?
A5: A short squeeze occurs when a heavily shorted asset's price rises, forcing short sellers to buy back shares to cover their positions, further driving up the price. A long squeeze, on the other hand, happens when the price drops, forcing long position holders to sell, which can exacerbate the decline.

Q6: What are analysts predicting for Bitcoin's future price movements?
A6: Some analysts, including CrypNuevo, suggest that a corrective pullback may occur after the recent surge, which could eliminate excess long positions before the market potentially resumes its upward trend.

Q7: How should traders approach the current market conditions?
A7: Traders are advised to remain cautious and avoid FOMO (fear of missing out). Some are considering using any potential pullbacks as opportunities to open long positions, particularly in promising altcoins.

Q8: What does the future hold for altcoins in relation to Bitcoin?
A8: Analysts are optimistic about altcoins, suggesting that Bitcoin's dominance may soon peak and decline, potentially allowing altcoins to gain more traction in the market.

Q9: Where can I find more information about cryptocurrency trading and market trends?
A9: For more insights and updates on cryptocurrency trading and market trends, you can follow financial news websites, cryptocurrency analysis platforms, and social media channels dedicated to crypto discussions.