Bitcoin Rebounds After $2,000 Drop, Liquidations Hit $500M

Bitcoin recovered from a sharp $2,000 drop over the weekend, trading just below $98,000 after falling to a three-day low of $95,800 on Saturday.

The dip caught traders off guard, triggering liquidations of nearly $500 million, according to CoinGlass data. Long liquidations soared to an 11-day high of $344 million, while shorts accounted for $136 million of the total.

Strong Demand Keeps Bitcoin Supported

Despite the volatility, analysts believe demand from retail and institutional investors will keep Bitcoin’s price supported as the year draws to a close.

In a note last week, QCP Capital highlighted:

“As we continue to see strong demand for Bitcoin alongside further easing of monetary policy by global central banks, prices are likely to remain supported as we approach the end of the year.”

Investor optimism is also buoyed by political shifts in the U.S., particularly President-elect Donald Trump’s pro-crypto stance and the expected regulatory overhaul at the Securities and Exchange Commission (SEC).

Regulatory Optimism

SEC Chair Gary Gensler announced his resignation last week, paving the way for Trump to appoint a new agency head. Gensler’s tenure was marked by criticism from the crypto community for what many saw as an overly aggressive regulatory approach.

Trump, who had promised to fire Gensler during his campaign, is now expected to select a more crypto-friendly successor. This potential shift in regulatory tone has fueled optimism in the market, not just for Bitcoin but also for other digital assets.

Ripple Effect on XRP and ETFs

The favorable sentiment has extended to XRP, which surged to a three-year high of $1.59 on Friday amid speculation that the SEC might drop its case against Ripple Labs.

There’s also robust demand for U.S.-listed spot Bitcoin exchange-traded funds (ETFs), led by BlackRock’s iShares Bitcoin Trust. BlackRock continues to dominate inflows and trading volume among its 11 competitors.

Options trading on Bitcoin ETFs has added to market volatility, with analysts noting increased activity speculating on further upside in the coming months.

Looking Ahead

As Bitcoin hovers near $98,000, market watchers anticipate continued support from:

• Strong retail and institutional demand.
• Potential easing of regulatory pressure under Trump’s administration.
• Increased activity in Bitcoin ETFs and options markets.

With tailwinds from political and financial sectors, Bitcoin appears poised to test the much-anticipated $100,000 milestone in the coming weeks.