Bitcoin Final Leverage Flush Below $80k Is Possible, Warns Analyst

An analyst has warned that Bitcoin’s recent liquidation event may not be finished, with remaining leverage potentially pushing prices somewhere between the $70,000 to $80,000 zone.

The pain may not be over yet for Bitcoin investors, according to one crypto analyst, arguing that there’s still more leverage that could be flushed out.

Crypto analyst James Check described the recent market meltdown as a “2-sigma long liquidation event,” which wiped out a “chunk of degen gamblers.”

Most of the leverage is gone, but the market “has an incredible nose that can sniff out the final hold-outs,” he added, cautioning that a further flush out could be on the cards.

A 2-sigma liquidation event in crypto refers to a significant market movement that triggers mass liquidations of leveraged positions, with “2-sigma,” or two standard deviations, indicating the statistical magnitude of the price swing.

Bitcoin shed over $24,000 in just ten days, dropping to a seven-month low of around $82,000 on Nov. 21.

The crypto markets showed tentative signs of stabilization after last week’s dramatic sell-off, and may have found a local bottom, Augustine Fan, head of insights at crypto trading software service provider SignalPlus, told Cointelegraph.

“Markets are currently so oversold from both sentiment and technical perspectives (such as Bollinger Bands), and prices are likely to have seen local lows for now, absent any new exogenous factors (such as DAT forced selling),” she said.

Related: Bitcoin’s Sharpe ratio is nearly at zero, a rare risk-reward signal

Fan expects prices to range between $82,000 and $92,000 and identified the next significant price support around the $78,000 area.

Source: CoinTelegraph