Bitcoin's large price swing over the weekend likely set the stage for a period of consolidation before the cryptocurrency can make another move higher. The digital currency fell over the weekend by as much as 15%, and other coins like ethereum also lost. At 4 p.m. EDT, Bitcoin traded around$ 55,970. Some crypto-linked equities were lower and Coinbase lost almost 2.6%. Meanwhile, Marathon Digital lost 9.6% and Voyager Digital lost 8.7%. There's been a lot of speculation and rumors about what pushed the market down over the weekend. It boils down to excess leverage within the system, said Leeor Shimron, Digital Asset Strategy Vice President- Fundstrat. We 've seen it over the last couple of weeks, particularly in bitcoin but it also spilled into other asset classes. Over the weekend, Binance said there was a large deposit of Bitcoin over Binance, which helped fuel speculation. When the sell off happened this weekend, about$ 5 billion worth of altcoin contracts was liquidated and$ 9.5 billion was liquidated including bitcoin markets, Shimron said. This is more than twice the notional value compared to Black Thursday 2020 when bitcoin's price dropped by 50% in 24 hours in bitcoin trade. The fact that this sell-off resulted in a drop of just 15% and quickly matured speaks to how much the market has grown and matured over the last year. Bitcoin tumbled in weekend trading below its 50-day moving average and was again below it Monday. The cryptocurrency was recently close to$ 55,900, according to Coin Metrics but was approximately$ 65,000 on Monday afternoon.
Julian Emanuel, head of equity and derivatives strategy at BTIG, said he expects bitcoin to trade in a range between$ 50,000 and$ 65,000 after the weekend shakeout. He said it could have entered a period of higher volatility while it has consolidated before moving lower again. Emanuel said he is watching the 50-day moving average at$ 56,500. A break below the 50-day moving average for a negative period of time warns of significant price momentum. Yesterday the price spiked to a low of$ 51,707; I would define it as literally the point of maximum frustration, Emanuel said. If you 're a bull or a bear, everyone has been keying off the 50 day moving average, and we think the best outcome is to keep up to the point of maximum frustration so volatility can come in and the price can correct. It is our expectation right now and our wish for the long-term health of the crypto market that we have a correction in time whereby both bulls and bears are frustrated by price action, he said. Bitcoin went on a slide to nearly$ 65,000 ahead of the recent coinbase debut on Nasdaq, which was seen as a new lure to bring investors into crypto assets. The least healthy thing would be a short-term break from the downside or the upside for the range we established over the last week, said Emanuel. Shimron of Fundstrat said he went into the weekend believing that bitcoin could hold$ 60,000 as the key level that it should hold.
But it failed and bitcoin moved closer to$ 50,000 temporarily. I would not be surprised if a larger period of consolidation is regained for the next couple of weeks or so until$ 60,000 is collected, Shimron said. We think bitcoin is going to consolidate for the rest of the year, even if we move higher in the next few weeks. Fundstrat expects Bitcoin to reach$ 100,000 by the end of the year.
Katie Stockton, chief technical strategist at Fairlead Securities, said if bitcoin closes below the 50-day moving average two days in a row, its next move could be to the support level around$ 42,000.