According to a crypto analyst, the pain for Bitcoin investors may not be over, as there is still more leverage that needs to be cleared.
Crypto analyst James Check described the recent market crash as a "2-sigma long liquidation event," which cleared out "a batch of 'degen' gamblers."
He added that while most of the leverage has disappeared, the market "has an astonishing sense to sniff out the last holdouts," warning that further liquidations may occur.
A 2-sigma liquidation event in cryptocurrency refers to significant market volatility that triggers large-scale liquidations of leveraged positions, with "2-sigma" or two standard deviations representing the statistical magnitude of price fluctuations.
Bitcoin fell more than $24,000 in just ten days, dropping to about $82,000 on November 21, a seven-month low.
After last week's severe sell-off, the crypto market showed initial signs of stabilization and may have found a temporary bottom. Augustine Fan, head of insights at crypto trading software provider SignalPlus, told Cointelegraph:
"From both sentiment and technical dimensions (like Bollinger Bands), the market is currently extremely oversold; in the absence of new exogenous factors (like DAT forced selling), the price has likely reached a temporary bottom."
Fan expects prices to fluctuate between $82,000 and $92,000, noting that the next important support level is around $78,000.
Analysts at blockchain data provider CryptoQuant identified a potential temporary bottom that could trigger a more sustained rebound.
"On-chain data indicates that the market is shaped by institutional redistribution, structural weakness, and a rebound that may point to a temporary bottom," analyst Carmelo Alemán said on Tuesday.
However, the key whale group holding between 1,000 to 10,000 Bitcoins is still selling, which hinders full confirmation of a trend reversal, he added.
Related: Polymarket receives CFTC regulatory approval to operate a brokerage trading platform in the U.S.
Original article: “Analyst Warns More Leverage Liquidations Could Push BTC Below $80K”
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