Bitcoin’s price has swiftly recovered above $100,000 after a flash crash cast a wick down to $90,500 on Dec. 5.
Bitcoin 4-hour chart. Source: Cointelegraph/TradingView
Despite the 14% plunge from its all-time high of $104,600, Bitcoin (BTC) has rallied by 4.57% on the daily chart, maintaining a bullish position above each exponential moving average (EMA) level on the four-hour chart.
Bitcoin funding rate resets after $400 million liquidation
Bitcoin’s swift decline occurred within one hour, during which the candle high and low values were $99,105 and $90,500, respectively. Bitcoin liquidations crossed $400 million during this brief period, identified as the largest liquidation event since 2021.
However, the major positive takeaway from the liquidation event that was BTC’s open interest-weighted funding rate underwent a reset, dropping from 0.09% on Dec. 4 to 0.01% on Dec. 6.
Byzantine General, a Bitcoin futures analyst, said the funding rate reset and that Bitcoin looks “really good.”
Bitcoin futures metric analysis. Source: Byzantine General
The anonymous trader highlighted the sharp decline in the funding rate, decreased aggregated open interest to the $95,000 level, and a drop in the aggregated spot premium. All these factors indicate a relatively deleveraged futures market compared to a few days back. They added:
“If BTC just continues pumping after that liq cascade, that would be insane, and then there’s truly nothing that can stop this train.”
Related: Bitcoin futures premium hits 8-month high — Will the BTC rally continue?
“This is normal” for Bitcoin
After the price volatility on Dec. 5, Bitcoin’s one-day chart saw the formation of a bearish spinning top candlestick pattern. A spinning top indicates a period of indecisiveness for the asset as both buyers and sellers push prices in opposite directions.
Coincidentally, this pattern has been observed at previous important milestones for Bitcoin. Charles Edwards, the founder of Capriole Fund, highlighted that Bitcoin acted similarly when it crossed $1,000 and $10,000, stating, “This is normal” for BTC.
Bitcoin 1-day analysis. Source:…
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