Apparently, there is no specific reason for Bitcoin's recent drop, and it could just be traders taking profits as the annual increase reached 170%.

Bitcoin trader cheering for trading success as falling charts

With a spike in volume, Bitcoin fell to US$40,700 in the last hour of this Sunday (10), one of the biggest drops since the beginning of its rally. Although he recovered the US$42,000 shortly afterwards, the fight in the region is intense.

Other cryptocurrencies took a ride on this rollercoaster and are trading lower this Monday (11). The second largest on the market, Ethereum (ETH) operates with a daily drop of 5.3%, while Cardano (ADA) losses exceed 9%.

As a result, more than R$2 billion in orders were settled in the last 24 hours. Of this number, over R$1.7 billion were longs (bought positions) and another R$275 million in shorts (sold positions).

Bitcoin tests $40,000 support and bulls try to find solid ground

Apparently, there is no specific reason for Bitcoin's recent drop, it could just be traders taking profits as the annual increase reached 170%.

However, it is worth noting that gold has lost 7.6% of its value since last week. On that date, when it reached its all-time high, the metal soared when the market estimated that the Fed would be ready to cut interest rates. Other currencies, stocks and Bitcoin were also rising.

Therefore, the market may have retreated in anticipation of the next Fed meeting, scheduled for next Wednesday (13), as well as the release of data from the American inflation index, called CPI, this Tuesday (12). In other words, the market is cautious and this may have made Bitcoin test the $40,000 support.

Bitcoin tests $40,000, bulls fight for $42,000. TradingView.

Soon after, Bitcoin was above US$42,000 again, a region that could be an important support if the bulls want to take this rally further.

Other cryptocurrencies also fall

As is already natural, the fall of Bitcoin also caused other cryptocurrencies to collapse in the early hours of this Monday (11). The highlights are Ethereum (ETH) and Cardano (ADA), with drops of 5.3% and 9%, respectively, but the decline was general.

Bitcoin makes other cryptocurrencies also operate lower this Monday (11). Coin360.

Ripple (XRP) and Solana (SOL) are two other giants that show losses. Among the few that operate on the rise are BinanceCoin (BNB), Avalanche (AVAX), Optimism (OP) and Injective (INJ).

Settlements exceed R$2 billion

As the drop in Bitcoin and other cryptocurrencies was somewhat unexpected, many traders were caught off guard. In total, settlements exceed R$2 billion, the majority of which are long positions. The biggest losses were in Bitcoin and Ethereum.

Cryptocurrency market settlements in the last 24 hours. CoinGlass.

According to CoinGlass data, US$350 million (R$1.7 billion) of the liquidations were longs, but even the bears lost money after the price rebound. Around US$55.7 million (R$275 million) of shorts were liquidated in the last 24 hours.

Regardless of the correction, Bitcoin has everything to continue its rise through the month of November. The reason is the possible approval of ETFs as early as next January, something that many investors are considering as a watershed moment for the largest cryptocurrency in the world.