Bitcoin has fallen again, with Asian stock markets dragging down the market.
On December 16, Bitcoin [#BTC ] opened and immediately fell by 4.5%, once dropping to the $857,000 mark. Meanwhile, Asian stock markets were also weak, with the Nikkei 225 index down 784 points, a decrease of 1.56%. This wave of decline directly dragged down the cryptocurrency market, with the total market value once dropping by 4.4%, although there was a slight rebound in the past few hours.
In the short term, Bitcoin has held the $857,000 support and rebounded to $865,000, but the market remains filled with panic and volatility. CoinGlass data shows that in the past 24 hours, the amount liquidated in the crypto market has reached $652 million.
Ethereum's liquidation amount exceeds that of Bitcoin, exposing leverage risk.
Interestingly, in this liquidation, the amount of Ethereum (ETH) being liquidated even exceeded that of Bitcoin. The liquidation amount for #ETH was $233.5 million (with long positions at $205.1 million), while Bitcoin was $184.8 million (with long positions at $168.8 million).
XWIN Research Japan points out that this round of decline is not triggered by spot selling, but rather by the accumulation of high-leverage liquidations below key support levels. The forced liquidation of long positions has compelled the market to generate sell orders, creating a chain reaction that exacerbates the price decline.
AMBCrypto believes that this is a healthy adjustment, clearing excess leverage and creating conditions for a subsequent stable spot-driven recovery.
Leverage rising, volatility may continue.
Since December 7, the open interest (OI) for Bitcoin has continued to rise, although there has been a slight pullback in the last few hours, the overall trend is still increasing. At the same time, leverage ratio (ELR) is also expected to be rising. The ELR metric measures the ratio of open interest on exchanges to token reserves, and its rapid increase indicates heightened short-selling activity, increasing the risk of volatility in the future.
Net flow data from exchanges shows that Bitcoin has been continuously flowing out of exchanges over the past month, which explains the trend of the ELR metric. At the same time, the increase in open interest also suggests that the short-term market may continue to experience significant volatility.
Pressure on support levels and market sentiment.
Currently, the market is still concerned that the support level of $84,000 may be breached, which reflects not only concerns about price volatility but also broader market pressures. On-chain analyst Axel Adler points out that the market phase index remains around 0.38, indicating that the transition mechanism is still in place, though selling pressure has not intensified, nor have there been obvious signs of recovery.
If the indicator rises above 0.43, it may signal a strengthening market. Until then, investors and traders should remain cautious, as bearish sentiment still prevails.
Summary: Sellers dominate, recovery still needs to wait.
During the Asian trading session, influenced by investor concerns, Bitcoin opened down nearly 4.5%, with the market still dominated by sellers. Although there was a slight rebound in the short term, a sustainable recovery has yet to appear. Traders need to pay attention to key support levels and changes in leverage, and proceed with caution.
