$13 billion long liquidated order in 2019 set for any trend about Bitcoin in 2020?
Bitcoin had a reasonably strong start in 2019, rising to as high as $ 13,900 in June. However, in the second half of the year, the momentum of the dominant Bitcoin began to decline. Volume dropped, overall interest in crypto dropped significantly, and trading value in the industry plummeted in the last quarter of the year. What precedent does it set for the trend of Bitcoin in 2020?
However, 2019 also marks two consecutive years that the long liquidation dwarfed that of shorts by more than two-fold. In 2018, the long liquidation reached $ 11 billion at the end of the year, while the short liquidation stood at $ 5 billion. In 2019, the long liquidation amounted to nearly $ 13 billion.
What is the trend of Bitcoin in 2020?
When it started to 2020, Bitcoin made investors dream of a halving season with strong gains. At the same time, reminisce about the events that led to intense cryptocurrency market correction by the end of 2018.
In December 2018, the price of Bitcoin dropped from about $ 6,500 to a low of $ 3,000 within a month, possibly due to mining and dumping investment during the holiday season. As a result, investors are concerned that a similar trend could occur by the end of 2019.
Bitcoin long liquidations dwarfed shorts in 2019 | Source: Unfolded
In the short term, while a pullback is expected, technical analysts often don’t expect BTC to reconsider the $ 4,000 area as it did by the end of 2018. However, the current Bitcoin price is the unlikely possibility of returning to the $ 4,000 region by early 2020. As interest in Bitcoin has begun to reverse, many investors have started to believe in a similar cynical move towards the end of 2018. That move set a precedent for Bitcoin price before 2020. This sentiment can make it difficult for BTC to recover before the halving event takes place in May 2020.
The significant liquidation of long contracts compared to shorts shows that many investors are confident that BTC will maintain the uptrend throughout the second half of 2019.
As for the institutional investors’ participation in the Bitcoin market, Bitcoin’s performance is weaker than expected. Therefore, they probably lost interest in this type of asset in the second half of the year.
Analysts at Unfolded said:
Through the course of the year, ~$20 billion got liquidated on @BitMEXdotcom, a ~20% increase since last year.
Assuming an average leverage of 25x:
~$800 million of user funds got liquidation on BitMEX during 2019.
— Unfolded (@cryptounfolded) December 29, 2019
It shows the sudden drop in BTC price from $ 13,900 to $ 7,000 that caught investors off guard — considering that, BTC defended $ 6,000 quite well as well as an essential level of support.
Favorable conditions for Bitcoin by 2020
Despite the price action, investors such as Galaxy Digital CEO Mike Novogratz still expect Bitcoin prices to once again return to the threshold of $ 12,000 before the end of 2020.
2020 prediction #1. @realDonaldTrump loses by more than 10mm votes. #2 $btc finishes over 12k. #3. @USAWrestling wins 3 golds in Tokyo (MF). #4 @tomhanks wins the Oscar for Mr Rodgers. #5 @reform and it’s partners help shrink the ‘supervised’ population from 4.5mm to 4mm or <
— Michael Novogratz (@novogratz) December 28, 2019
Others, like Tim Draper, Tom Lee, and Brian Kelly, believe that $ 100,000, as well as $ 250,000, could be BTC’s long-term goal.
With the halving event in May 2020 approaches, investors continue to believe in BTC’s medium-term potential.
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