Earlier today, Bitcoin went through a textbook purge. Plunging as low as $40,400 before rebounding to spot levels, this sudden drop triggered the "textbook cleanse" necessary to liquidate speculators.

Drops and rallies have eliminated open interest before prices recover, which is what you want to see. In the coming trading days, Bitcoin may rise slightly towards $48,000.

Bitcoin plunges, liquidations exceed $120 million

However, this wave of erosion exceeding even guidance could weaken market sentiment and force inexperienced holders and traders to take profits, thereby giving holders more control. Considering that when analyzing Bitcoin price action from the top-down preview, the upward trend remains, which could serve as the basis for further gains in the coming days.

Meanwhile, today's flash crash saw more than $105 million in leveraged long positions liquidated, although more than $15 million in short positions were liquidated amid a rapid recovery in price, perhaps signaling a shift in market sentiment.

Will Bitcoin rise to new all-time highs?

It’s worth noting that despite the heightened volatility, the upward trend remains in place when looking at Bitcoin’s daily price chart. Therefore, it remains to be seen whether today's sell-off will be confirmed in the next 24 hours. However, looking at the candlestick arrangement on the daily chart, the lower lows are being rejected, suggesting that the market may be looking for new support levels.

The price chart shows the $45,000 level as key resistance. If steady, high volume growth occurs above this level, Bitcoin could not only break above $48,000 and $50,000, but potentially lock the price at $69,000 in the coming weeks.

Additionally, as the cryptocurrency regulatory landscape continues to change, the U.S. Securities and Exchange Commission (SEC) may approve the first Bitcoin ETF in early January 2024. This bullish catalyst could provide additional momentum to Bitcoin bulls. A regulated ETF would provide institutional investors with easier access to Bitcoin, potentially driving demand and pushing up prices.

Overall, the current market environment provides the possibility for further gains for Bitcoin. However, there are still many uncertainties in future trends, including factors such as technology, market sentiment, and policy environment. Therefore, investors still need to remain cautious and rational when participating in the cryptocurrency market.

The above is the analysis and outlook of the current Bitcoin market, and I hope it can provide some reference for investors.