Introduction
The recent price pullback of Bitcoin (BTC) by 8.2% over four days has raised questions about the market’s direction. The decline, which saw $250 million in liquidations of bullish leveraged positions, has not led to panic or pushed key metrics into bearish territory. This article will examine the current market conditions and provide insights on whether this price correction signals a trend reversal.
Derivatives Market
The derivatives market, specifically futures contracts, has been closely watched for signs of stress in the market. The 22.6% price surge between Nov. 9 and Nov. 13 resulted in $342 million in buyer liquidations through BTC futures contracts (Fig. 1). This excessive leverage among derivatives traders is seen as a temporary factor contributing to the recent price correction.
Figure 1: Bitcoin Futures Aggregate Liquidation, USD
| Date | Price Change | Liquidations |
| — | — | — |
| Nov 9-13 | +22.6% | $342M |
This data suggests that the current price pullback is not necessarily a sign of a trend reversal but rather an adjustment in the derivatives market.
Bitcoin Miners’ Activity
To assess investor sentiment, it is essential to evaluate Bitcoin miners’ activity. These entities collectively hold approximately 1.8 million BTC, valued at over $166.3 billion, and are responsible for releasing 3.125 BTC per mined block (Fig. 2).
Figure 2: Bitcoin Miners’ Net Position Change, BTC
| Date | Net Position Change |
| — | — |
| Nov 25-26 | -2,500 BTC |
Recent data reveals that miners have been reducing their Bitcoin positions at a rate of approximately 2,500 BTC per day, equivalent to $231 million. In contrast, US Bitcoin spot exchange-traded funds (ETFs) recorded an average daily inflow of $670 million between Nov. 18 and Nov. 22.
Figure 3: Long-term Net Position Change, BTC
| Date | Net Position Change |
| — | — |
| 5+ months ago | -1,200 BTC |
Long-term holders have also contributed to selling pressure. Historical patterns show similar behavior in late March, following multiple failed attempts to breach the $73,500 mark (Fig. 3). Profit-taking by some whales triggered a two-month correction, culminating in Bitcoin hitting a low of $60,830 on May 1.
Historical Trends and Possible Bottom
If historical trends hold, Bitcoin’s price may bottom around $82,500—a standard 17% correction from its all-time high (Fig. 4). This is far from signaling a bear market.
Figure 4: Historical Price Patterns
| Date | Price |
| — | — |
| March 14-16 | $73,500 |
| May 1 | $60,830 |
In comparison, during the correction between March 14 and May 16, US spot Bitcoin ETF holdings showed little change, and MicroStrategy made a single purchase of 24,400 BTC. This time, the landscape differs significantly with strong spot ETF buying and additional institutional players mirroring MicroStrategy’s approach.
Growing Corporate Adoption
Among these are Japan’s MetaPlanet, Semler Scientific in the US, and Marathon Digital, a leading global Bitcoin miner (Fig. 5). This coordinated activity suggests growing corporate adoption, which could provide a solid support level for Bitcoin’s price.
Figure 5: Growing Corporate Adoption
| Entity | Date | Acquisition |
| — | — | — |
| MetaPlanet | Nov 20 | 10,000 BTC |
| Semler Scientific | Nov 18 | 15,000 BTC |
| Marathon Digital | Nov 22 | 13,000 BTC |
Market Confidence and Sentiment
Although it is uncertain whether these entities will maintain their Bitcoin acquisition pace, the fact that Microsoft shareholders are reportedly debating a similar strategy further bolsters market confidence (Fig. 6).
Figure 6: Market Confidence
| Date | Event |
| — | — |
| Nov 25 | Microsoft Shareholders Debate Bitcoin Acquisition |
The put-to-call ratio has risen above 6%, indicating growing fear of a sharp price decline. However, the 25% delta skew remains within the neutral range (Fig. 7).
Figure 7: Options Market Sentiment
| Date | Delta Skew |
| — | — |
| Nov 16-26 | -2% to +4% |
The options market shows a shift towards neutral sentiment with put and call options trading at similar premiums.
Conclusion
In conclusion, the recent price pullback of Bitcoin by 8.2% over four days is not necessarily a sign of a trend reversal but rather an adjustment in the derivatives market. The inability to breach the $100,000 psychological threshold has led to selling pressure from long-term holders and miners. However, historical trends suggest that this correction may bottom around $82,500, far from signaling a bear market.
The growing corporate adoption and strong spot ETF buying have provided a solid support level for Bitcoin’s price. Market confidence is bolstered by the potential entry of Microsoft shareholders into the Bitcoin market. The options market shows a shift towards neutral sentiment with put and call options trading at similar premiums.
This data suggests that the current market conditions are not as bearish as they may seem, and investors should remain cautious but optimistic about the future of Bitcoin.
