Decentral Block Post

Bitcoin (BTC) speculators panic sold as the BTC price corrected toward $40,000, the latest on-chain data suggests.

Figures from on-chain analytics firm Glassnode show short-term holders (STHs) offloading more than $2 billion in BTC on Dec. 12 alone.

Bitcoin short-term holders set 18-month selling record

Bitcoin saw its biggest single-day drop of 2023 this week — one which at one point totaled 8.1%, data from Cointelegraph Markets Pro and TradingView confirms.

Reacting, the more speculative subsection of the Bitcoin investor base followed in step, reducing their exposure in what appears to be a bout of cold feet on the market outlook.

Glassnode reveals that STHs, which constitute entities holding BTC for 155 days or less, sent $1.93 billion worth of coins to exchanges on Dec. 11, followed by another $2.08 billion the day after.

Bitcoin (BTC) price continues to trade below its 2023 high, a sign that investors may have underestimated the strength of the $44,000 resistance. Even as BTC price trades below $42,000, it doesn't necessarily mean that reaching $50,000 and beyond is no longer possible. In fact, quite the opposite seems more likely to occur. Looking at Bitcoin derivatives metrics, it is clear that traders ignored the 6.9% drop and remained optimistic. However, is this optimism enough to justify further gains?

The $127 million liquidation of leveraged long Bitcoin futures on Dec. 11 may seem significant in absolute terms, but it represents less than 1% of the total open interest – the value of all outstanding contracts. Nevertheless, it's undeniable that the liquidation engine triggered a 7% correction in less than 20 minutes.

Bitcoin’s crash was accelerated by derivatives, at least in the short-term

On one hand, one could argue that derivatives markets played a crucial role in the recent negative price movement. However, this analysis overlooks the fact that after hitting a low of $40,200 on Dec. 11, Bitcoin's price increased by 4.2% in the following six trading hours. In essence, the impact of forceful liquidation orders had dissipated long ago, disproving the notion of a crash solely driven by futures markets.

To determine if Bitcoin whales and market makers are still bullish, traders should examine Bitcoin futures premium, also known as the basis rate. Professional traders prefer monthly contracts due to their fixed funding rate. In neutral markets, these instruments trade at a premium of 5% to 10% to account for their extended settlement period.

Data reveals that the BTC futures premium barely fluctuated despite the 9% intraday price drop on Dec. 11, as it remained above the 10% neutral-to-bullish threshold throughout. If there had been significant excess demand for shorts, the metric would have at least dropped into the neutral 5% to 10% range.

AVAX, the native token of the Avalanche ecosystem has surprised the market, posting double-digit gains amid a drawback in the wider crypto space. AVAX token smashed through the $40 barrier on Dec.12 to reach an intra-day high of $43. At the time of publication, the layer 1 token trades at $38, up 12% over the last 24 hours and 123% over the last 30 days.

AVAX’s market cap soars 341% in two months

The latest rally has seen Avalanche’s total market value grow more from $3.25 billion when the recovery started in mid-October to the current value of $14.35 billion. This represents an increase of over $341% in just two months.

This is $1.06 billion more than Dogecoin’s $13.29 billion, flipping it to secure the ninth position on the CoinMarketCap ranking.

AVAX’s market capitalization has also increased by 200% over the last 12 months, from $4.04 billion recorded in December 2022.

AVAX is not the only crypto soaring within the Avalanche ecosystem. JOE (JOE) — the native token of Avalanche’s decentralized exchange Trader Joe, and QI – the native token of Avalanche’s liquid staking protocol Benqi, are also surging, with 5% and 20% gains respectively over the last 24 hours.

AVAX, the native token of the Avalanche ecosystem has surprised the market, posting double-digit gains amid a drawback in the wider crypto space. AVAX token smashed through the $40 barrier on Dec.12 to reach an intra-day high of $43. At the time of publication, the layer 1 token trades at $38, up 12% over the last 24 hours and 123% over the last 30 days.

AVAX’s market cap soars 341% in two months

The latest rally has seen Avalanche’s total market value grow more from $3.25 billion when the recovery started in mid-October to the current value of $14.35 billion. This represents an increase of over $341% in just two months.

This is $1.06 billion more than Dogecoin’s $13.29 billion, flipping it to secure the ninth position on the CoinMarketCap ranking.

AVAX’s market capitalization has also increased by 200% over the last 12 months, from $4.04 billion recorded in December 2022.

AVAX is not the only crypto soaring within the Avalanche ecosystem. JOE (JOE) — the native token of Avalanche’s decentralized exchange Trader Joe, and QI – the native token of Avalanche’s liquid staking protocol Benqi, are also surging, with 5% and 20% gains respectively over the last 24 hours.