This year\u2019s rallies diverged from the scenario last seen in 2017, when assets moved up almost daily for the final stretch of the year. This year, cryptocurrencies are much more liquid, though still volatile in the short term. <\/p>\n\n\n\n
After a period of stagnant prices just under $60,000, BTC crashed on Friday, erasing $9,000 in a single candle. Panic-selling, liquidations and low liquidity sent the price as low as $42,000 on some exchanges. <\/p>\n\n\n\n
Since then, BTC regained the $49,000 level. On Monday, the coin traded at $48,980.25, with only a small change since Sunday. The leading asset is still at a significantly higher range since December 2020, but the more optimistic model seems to break down. <\/p>\n\n\n\n
BTC prices took down market cap dominance to 40.8%, while value shifted to altcoins over the past month. The fear and greed index, based on the recent BTC crash, unraveled to 16 points or \u201cextreme fear\u201d, levels not seen since the May sell-off. <\/p>\n\n\n\n
One of the reasons for the BTC crash were signs the leading coin may not follow the stock-to-flow model and climb to above $100,000 as predicted. The recent price is further divergence from the model. <\/p>\n\n\n\n
According to the rainbow chart, BTC at this price is at the stage where holding is the best strategy. Prices under $40,000 would be counted as \u201cstill cheap\u201d relative to a notion of a general trend over the years. <\/p>\n\n\n\n
Despite the slower growth of leverage, the December capitulation for BTC was one of the biggest this year. Because of the higher BTC price, the value of liquidations was also among the biggest in history. <\/p>\n\n\n\n
Once again, the event pointed to the always present possibility of a liquidation cascade, affecting markets like DeriBit more, but also felt on the Binance futures market. Despite the cautious adding of leverage, futures open interest reached peak levels just before the deleveraging event of December 3. <\/p>\n\n\n\n