Haider Rafique, World Chief Advertising Officer at OKX, has warned of heightened volatility as Bitcoin approaches the $100,000 mark.
Bitcoin (BTC) rallied near the $100,000 mark final week however fell in need of breaking this psychological resistance degree and had succeeded to $93,428 at press time. In an announcement to crypto.information, Rafique defined that the pullback was triggered by “profit-taking” amongst Bitcoin holders.
In accordance with the OKX exec, many long-term holders who gathered Bitcoin across the $30,000 degree are actually realizing returns of two to 3 instances their preliminary funding at present costs. This has positioned $100,000 as a key liquidation goal for profit-taking.
On the identical time, important promote strain from these profit-takers is being countered by robust buyback momentum.
Rafique highlighted that establishments like MicroStrategy, which continue to accumulate Bitcoin, are lowering obtainable liquidity on exchanges and creating upward value strain.
“The present lengthy/brief ratio displays a barely bearish sentiment, with extra brief positions than longs. Nevertheless, this setup is precarious,” Rafique continued. In accordance with him, as Bitcoin approaches $100,000, “dual-sided strain” is more likely to emerge.
On one aspect, long-term holders are anticipated to take earnings, including sell-side strain. On the opposite, closely leveraged brief positions might face liquidations if Bitcoin crosses key thresholds, triggering cascading purchase orders to cowl these positions.
This mixture, Rafique burdened, is a recipe for heightened volatility, with the potential for fast value swings in each instructions.
Nevertheless, he famous that whereas short-term pullbacks are a chance, they’re unlikely to final lengthy or set off widespread panic. As an alternative, Rafique advised that these dips might current engaging alternatives for consumers to enter the market.
“If there are pullbacks, these dips are more likely to be seen as prime shopping for alternatives slightly than triggers for panic promoting. Bitcoin’s historical past, when it dropped to the $50K degree, there was a lot shopping for demand that it rapidly rose again as much as $60K.”
Different market pundits additionally agree that the potential of value corrections can’t be dominated out as BTC tries to hit the six-figure milestone.
In a Nov. 26 X post, CryptoQuant CEO Ki Younger Ju famous that pullbacks of as much as 30% usually are not unusual throughout parabolic bull runs. He pointed to Bitcoin’s 2021 cycle when it surged from $17,000 to $64,000 regardless of enduring “a number of sharp corrections.”
Ju suggested buyers to handle dangers and keep away from “panic promoting at native bottoms,” stressing that the market stays in a “bull market.”
QCP Capital analysts additionally echoed this sentiment in a latest investor observe, describing latest corrections as “not panic-worthy,” including that Bitcoin was “taking a breather” after its latest rally.
