Bitcoin has shown resilience, recovering from a shock sell-off experienced last week. The spot price of the cryptocurrency, as traded on platforms such as Robinhood’s bitstamp.net, demonstrated a notable rebound. At 2.20pm in New York on Monday (Tuesday AEDT), Bitcoin was trading 1.6 per cent higher, reaching $US88,731. Earlier in the day, however, it had dipped as low as $US85,421, highlighting the volatility still present in the market.
Nigel Green, from DeVere Group, commented on the situation, attributing the rapid decline from $US120,000 to $US80,000 to a leverage pivot. He noted that over $US19 billion in long positions had already been liquidated. Green stated that the market is now structurally cleaner than it was at its peak, which is crucial for Bitcoin’s ability to recover, as it depends on what remains after the forced selling clears.
Looking ahead, Green highlighted the Federal Reserve’s December policy meeting as a short-term key factor. He explained that many investors have reduced their exposure due to a lack of clarity regarding the Federal Reserve’s next move. However, once that clarity emerges, a swift shift in positioning is anticipated. The probability of a quarter-point rate cut next month has also recovered at the start of the US trading week, nearing 80 per cent after briefly plunging below 40 per cent last week.
