Bitcoin Dips to $93,000 With $400 Million in Longs Rekt. Where to From Here?

Bitcoin witnessed a sharp sell-off on Monday, with the asset’s single-day performance giving up more than half of the gains made last week.

The world’s largest crypto fell 4.8% on the day to just above $93,000, with Monday’s drop totaling more than $4,800. For context, that’s more than 55% of last week’s $8,100 runup.

Still, analysts say the move is likely part of traders rebalancing their positions as they look to the end of the year, particularly in late December, which has proven to be a favorable month in the past.

“We see a combination of two catalysts pushing Bitcoin’s price down temporarily,” Ryan McMillin, chief investment officer at crypto fund manager Merkle Tree Capital, told Decrypt.

He pointed to a “sell wall” just below the “psychological barrier” right around $100,000, where traders are looking to capitalize on an explosive run following President-elect Donald Trump’s victory three weeks ago.

McMillin also pointed to a build-up of leveraged longs, or those betting on higher prices, as “too tempting” for market makers not to chase.

In other words, market makers who facilitate liquidity may intentionally drive prices down to trigger a liquidation of those leveraged longs.

Liquidations spiked on Monday to $550 million, 70% of which came from long positions. It follows a similar trend observed on Sunday. Still, McMillin says this is just part of normal market behavior.

“There isn’t much liquidity below $92,000, so that looks like the floor for this move,” McMillin said. “We expect the market to go and retest $100,000 before the week is out.”

Others agree, claiming Monday’s move is a part of typical market dynamics with traders hedging against potential downside risks, likely in response to recent moves.

“Pullbacks like these are not uncommon in bull markets,” Nick Forster, founder of DeFi derivatives protocol, Derive, told Decrypt. “We are seeing strong structural tailwinds for Bitcoin, bolstered by favorable conditions such as the interest-rate cutting cycle and evolving regulatory frameworks.”

Other cryptos in the top 10 by market capitalization have also dipped, with Dogecoin (DOGE) taking the most significant hit, down about 9.5% to $0.38, CoinGecko data shows.

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