After an early plunge, Bitcoin (CRYPTO: BTC) staged a comeback while crypto liquidations shrank rapidly, although analysts see continued uncertainty over the market's next move.

What Happened: Data from Coinglass showed total liquidations collapsed to just $175 million over the last 24 hours, a far cry short from the $652 million over 24 hours on Jan. 3. Bitcoin has accounted for $52 million of that total, while Ethereum (CRYPTO: ETH) bets worth $19 million were liquidated. Among altcoins, Solana (CRYPTO: SOL) has seen just over $10 million wiped out over the last 24 hours.

Why Does It Matter: While the market rebounded after a Matrixport report spooked traders, the depth of any recovery remains unclear. Bitcoin proponent CRG said on X: “After a big liquidation event like we had yday, market usually chops for a while to build momentum back up for the next move. So BTC could simply go nowhere for a few days+. Don't get chopped up.”

Crypto analyst CrediBULL Crypto reminded users: "Told you guys we were due for a massive liquidation!" Meanwhile, liqs from this move were comparable to the move from 3 weeks ago and $BTC failed to breach 40k once again."

"Told you guys we were due for a massive liquidation!"

Meanwhile, liqs from this move were comparable to the move from 3 weeks ago and $BTC failed to breach 40k once again. pic.twitter.com/XpxFEY0HS1

— CrediBULL Crypto (@CredibleCrypto) January 3, 2024

Co-founder & CEO of Cryptoquant, Ki Young Ju highlighted traders booking profits after buying Bitcoin at around $16,000 about a year ago, rather than waiting for a potential ETF.

Ki: Why sell #Bitcoin now before the spot ETF approval, Mr. Whale?

Whale: I don't give a sh*t, bro. Entered at $16k, time to profit. https://t.co/GNmIiRJFuh

— Ki Young Ju (@ki_young_ju) January 4, 2024

With data from Coinglass indicating a potential local top, traders are treading with caution after Jim Cramer's untimely bullish turn on Bitcoin.

Price Action: Bitcoin was up 3.6% in the past 24 hours to $43,969 at the time of publication. However, trading volume dropped 8.6% over the past day.

Now Read: Bitcoin ETF, Goldman Sachs and BlackRock – What's Going On?

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