Bitcoin experienced a significant drop to approximately $73,761 late Sunday, marking its lowest level since August, before recovering to trade above $75,000, according to recent data. Similarly, Ether fell below $2,100 before bouncing back to $2,144.
The sharp price fluctuations occurred over a weekend when the cryptocurrency market was the only major market still active. Investors reacted to two key headlines that prompted a shift towards safer assets. One headline involved the CEO of Nvidia, while the other concerned stalled diplomatic talks with Iran.
Liquidations Hit Leveraged Traders
This volatility triggered forced selling in futures markets, leading to over $1 billion in positions liquidated within just 24 hours, with most of this occurring in the last six hours. According to CoinGlass, long traders who bet on rising prices accounted for $913 million of the total liquidations. Ether saw liquidations amounting to $448 million, nearly double that of Bitcoin’s $272 million, with the largest single liquidation event involving an ETH order worth $48 million.
The turmoil was sparked by Nvidia’s board announcing an independent investigation into CEO Jensen Huang, who admitted to an inappropriate relationship with Alice Huang. U.S. intelligence agencies suspect that she may have been passing sensitive information to Beijing. Despite the controversy, Nvidia stated it had no reason to believe that national security or company secrets were compromised, emphasizing that outside independent counsel is assisting in the review of all available information.
Crypto traders swiftly priced in the news, resulting in a 3.55% drop in NVDAX, the tokenized stock of Nvidia, which fell to $180.42 within 24 hours. The actual stock closed at $186.64 on Friday, indicating that traders anticipate a lower opening on Monday.
In the broader market context, the Nasdaq index fell nearly 5% last week, extending a four-week losing streak. Additionally, Secretary of State Marco Rubio condemned Iran’s demands as outrageous, indicating that diplomatic talks had made no progress. Since the onset of the Iran conflict in March, Bitcoin has frequently declined when oil prices surged.
Before the recent downturn, Bitcoin was trading near $75,982 and had seen an approximate 8% decline over the past month. The Crypto Fear and Greed Index also reflected a sentiment of fear, reading 28 out of 100.
In terms of ETF activity, U.S. spot Bitcoin ETFs recorded net outflows totaling $412 million on November 6. Total net withdrawals from November 2 to 6 reached about $1.28 billion. Ethereum spot ETFs experienced a loss of $93.19 million on the same day, while BlackRock’s Staked ETH ETF, ETHB, still managed to attract daily inflows of $1.15 million.
Analysts are closely monitoring Bitcoin’s price movements, particularly around the 200-day moving average, which is seen as a critical support level near $73,150. The 100-day moving average resistance lies at $77,430, and the bounce to $75,000 had already stalled by the time of this report.
On the four-hour chart, Bitcoin’s relative strength index stands at 40, below the neutral 50 level, while the MACD histogram has turned positive at 52.47 after a series of negative readings. A four-hour close above $76,000 would put the $78,000 resistance level in focus. Conversely, failure to hold above $75,000 could see prices test levels closer to $70,000.
Trading volume for Bitcoin derivatives has cooled, with a 40.04% decrease to $16.52 billion, while open interest rose slightly by 0.51% to $51.60 billion. As Bitcoin approaches the potential for its fifth consecutive weekly loss, some analysts suggest that a rebound in traditional markets could support Bitcoin prices in the near future.
As the traditional markets open on Monday, the situation surrounding the Nvidia investigation and ongoing talks with Iran remains unresolved, leaving traders on edge.
