Bitcoin under pressure: record liquidations and new market scenarios

In the past two days, the cryptocurrency market has experienced moments of intense tension, with over $1.6 billion in liquidations. In this context, bitcoin is fluctuating around $104,000, a level that has severely tested investor confidence and led to approximately 30% of the total bitcoin supply being “underwater,” meaning held at a price higher than the market value. This raises crucial questions: are we facing a simple temporary correction or a true market reset?

The Dynamics Behind the Crash: Analysis by Jake Kennis

Jake Kennis, Senior Research Analyst at Nansen, has closely monitored on-chain data to better understand the dynamics driving this phase of uncertainty. According to Kennis, it is still unclear how long this bearish pressure will last. The market has indeed broken through some key levels on several major assets, fueling the bears’ momentum and recalling what happened during the liquidation event on October 10, when the scarcity of buy orders left many altcoins vulnerable.

Liquidation events of this magnitude, explains Kennis, often take weeks to be fully absorbed by the market before a clear direction emerges. In the meantime, volatility remains high and traders’ confidence is severely tested.

Bitcoin: Signals to Monitor for the Future

Regarding bitcoin, analysts are waiting for a sign of strength: a decisive recovery and the reclaiming of key technical levels would be necessary to determine whether this is merely a short-term selling phase or the beginning of a deeper correction. Another crucial factor to watch is the ETF flows: since October 29, both Bitcoin and Ethereum have recorded significant net outflows from major spot ETFs, while Solana has continued to attract inflows, despite a lackluster price performance.

These movements suggest that while some capital is moving out of traditional financial products linked to cryptocurrencies, other assets like Solana are still able to capture the interest of investors, perhaps in search of new opportunities or diversification.

On-chain Activity and Volatility: What the Data Reveals

Despite the price pressure, on-chain activity remains relatively stable. The number of active addresses and transactions does not show significant declines, indicating that the user base continues to utilize the network. Another interesting element is the volumes on DEX (decentralized exchanges), which have seen an increase over the past week, driven primarily by Solana, Ethereum, BNB, Base, and Arbitrum.

The presence of high leverage in the derivatives markets contributes to amplifying short-term volatility. This scenario suggests that the market could remain unstable for a while, without a defined direction until speculative pressures subside and a new equilibrium between supply and demand emerges.

Possible Scenarios: Correction or Reset?

The question analysts and investors are asking is whether this phase represents a simple technical correction or the beginning of a broader market reset. According to Jake Kennis, it is still too early to draw definitive conclusions. Operators are closely monitoring liquidity flows, on-chain data, and some broader macroeconomic indicators, awaiting signals that could clarify the future direction of the market.

In the past, such intense liquidation phases have been followed by both rapid recoveries and prolonged periods of weakness. Much will depend on bitcoin’s ability to reclaim key technical levels and the return of confidence from institutional investors, often measurable precisely through flows into ETFs.

Solana and the Others: Who’s Weathering the Storm

A striking fact emerging from this market phase is the resilience of Solana. Despite price weakness, Solana continues to attract inflows and lead volumes on DEX, indicating that some investors still see potential in this asset and its ecosystem. Ethereum, BNB, Base, and Arbitrum also show signs of vitality in the decentralized transaction sector, confirming that innovation and user activity remain key elements for market stability.

Conclusions: Caution and Constant Monitoring

The cryptocurrency market is in a phase of significant uncertainty, with bitcoin fluctuating at critical levels and a substantial portion of the supply in loss. Record liquidations over the past 48 hours have highlighted the fragility of certain assets and the need to closely monitor both on-chain data and capital flows.

Analysts, such as Jake Kennis from Nansen, urge caution: only a decisive recovery and the reclaiming of key levels can dispel doubts about a possible market reset. Meanwhile, attention remains high on ETFs, on-chain activity, and liquidity movements, as we wait to understand whether this will be just a negative blip or the beginning of a new phase for the crypto world.