#BTCFlashCrash $BTC #ShareWeekly

Short answer first. I think this was a leverage flush, but a flush that landed on a weak spot, and that is why I’m not calling it finished.

What happened

Late Sunday, BTC fell about 2.8% in roughly 15 minutes, from near 75,600 to a low around 73,510, then recovered most of it. About $745 million was liquidated in one hour, and $715 million of that was longs. That is about 96% longs, and it works out to roughly $255 million of long liquidations for every 1% of price drop, by my math. Over the full 24 hours, different trackers show anywhere from $850 million to $1.3 billion, mostly longs. Ethereum fell harder, about 7% to near 2,060, and its ratio against BTC dropped to a new low since September.

The case for a flush

Positioning was crowded. One derivatives snapshot on Friday showed about 76% of accounts long, with funding at 0.01% every eight hours, around 11% a year. When most traders sit on one side and pay to stay there, a small push can set off a chain reaction.

The shape of the move fits too. A drop of nearly 3% that is mostly reversed within minutes looks like forced selling, not a holder who wants out.

The wick also tagged my 73,539 support line almost exactly. The low was 73,510 and price bounced right away.

And a week ago the pain went the other way, when shorts were about 60% of roughly $950 million liquidated. The market has been burning leverage on both sides, which resets positioning.

The case against calling it over

The flush landed under important lines. Saturday’s close at 74,968 was the first weekly close below the 50 week average in seven weeks. Price is also under the short term holder cost basis, estimated near 75,700, which means recent buyers are sitting on losses. Buyers who are underwater tend to sell into bounces.

Spot demand is missing. US ETFs saw about $1.28 billion in outflows last week, the largest since June, with $412 million leaving on Friday alone. A flush works best when real buyers show up afterwards. So far they haven’t.

To keep it fair, the bigger picture is not broken. BTC is still about 26% above the June low of 59,517.

The map from my chart, price at 74,582

Above: 75,500 is 1.2% higher, 75,812 is 1.7% higher, 76,500 is 2.6% higher, 77,020 is 3.3% higher, 77,568 is 4.0% higher, 81,650 is 9.5% higher and 83,736 is 12.3% higher.

Below: 73,539 is 1.4% lower and 73,170 is 1.9% lower. That last line is the 200 day average. RSI is about 35 and MACD is below zero.

Two things stand out. There are five marked levels packed between 75,500 and 77,568, so any bounce runs into a thick wall of supply. And there is only 1.9% of room down to the 200 day average, with nothing marked below it on my chart. On paper, the move to 77,568 is about twice the move down to 73,170, but the wall above makes that reward harder to collect.

What would settle it

First, a daily close above 75,500, then 76,500, together with ETF flows turning positive. That says buyers are back.

Second, a daily close below 73,170 on strong volume, not just a wick. That says the flush was the first leg, not the whole move.

Third, tomorrow’s CPI. It is the last inflation report before the Fed’s December meeting, and hike odds sit near 80%. A hot print that lifts yields would hit BTC right on this line.

After that, I would watch whether funding stays calm and open interest rebuilds. If leverage piles back in while price is still weak, I’d expect another flush.

My take: a flush for now, not a broken trend, but a wick is only a wick and a daily close decides. I’m not buying the dip blindly and I’m not shorting the lows. I’d rather see price accepted above 75,500 or held at 73,170 first. If that 200 day line gives way on a close, I’d treat the area under it as thin and expect fast moves.

Not financial advice.

Do you read this as a one time leverage reset, or the first leg of something bigger? And where is your line, 75,500 or 73,170?

@Gate_Square