“Weak longs” might be causing the price to slip in the bitcoin market but ether locked in DeFi is back on the upswing.

A fairly tepid market Monday opened the week, keeping bitcoin’s price in a range betweent $19,200 and $19,400 until traders began hitting the sell button around 18:00 UTC (1 p.m. ET). At that time, the price per 1 BTC went as low as $18,923 and was at $19,067 as of press time, according to CoinDesk 20 data. 

“The market has come a long way in a relatively short space of time,” said Rupert Douglas, head of institutional sales for brokerage Koine. “Bigger picture, the market is headed higher but I am expecting lower prices first, maybe to around $13,700 to flush out the weak longs at some stage.”

“Weak longs” are certainly being shaken out. Over $16 million in sell liquidations on derivatives venue BitMEX occurred over the past three days, which has made up 72% of $22 million total automated margin calls it had over that time period. 

Much like a margin call, a “sell liquidation” on BitMEX happens when prices fall, forcing leveraged longs to close out their position.  

While BitMEX’s influence has indeed waned over the course of 2020 due to regulatory quagmires, sell liquidations on the exchange still help reinforce Douglas’ market thesis. 

“There is a lull in the market as a whole,” said Constantin Kogan, a partner at crypto investment firm Wave Financial and a mega-bull on bitcoin. “MicroStrategy invested another $50 million in bitcoin at a rate above $19,000, so the sentiment is still positive.”  

Read More: MicroStrategy Buys Additional $50M in Bitcoin

“Bitcoin is consolidating under its all-time high resistance with volatility compressing to pre-uptrend levels,” said Cindy Leow, portfolio manager of multi-strategy crypto firm 256 Capital. Indeed, volatility is dipping ever so slightly after a steady upward trend.

“We see a return to mean reversion, with bitcoin ranging steadily between $17,000 and $20,000,” Leow added. The last time bitcoin traded at $17,000 was back on Nov. 17, according to CoinDesk 20 data.

Cashing out winning positions was the preferred narrative of analysts Friday, and Leow also concurs. 

“We continue to remain short-term cautious mainly due to potential year-end outflows and seasonal factors,” she said. “We anticipate heavy profit-taking from marked-up books and positions unwinding.” 

Some rotation into other crypto assets, known colloquially as “alts” and particularly in the Ethereum ecosystem, also seems to be a trend, Leow said. “A neutral scenario is for the rest of the year that we remain within this range while profits from BTC recycle into alts.”

The second-largest cryptocurrency by market capitalization, ether (ETH), was down Monday, trading around $586 and slipping 1.5% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

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The amount of ether “locked” in decentralized finance (DeFi) is now over 7 million ETH, worth $4.1 billion as of press time. It’s an uptrend in December after a November where total value locked, or TVL, dropped to as low as 6.6 million ether.

Analysts say market dynamics are in play as traders clearly had been rotating ether out of DeFi but now seem to be plowing back in. 

“One contributing factor can be simply that BTC was outperforming ETH in November,” noted Jake Brukhman, chief executive officer of investment firm CoinFund. 

256 Capital’s Leow also noted that excitement around DeFi might be back on the upswing. “While bitcoin rests just shy of all-time highs, DeFi blue-chip tokens are bouncing again on the back of Eth 2.0's announcements and general market excitement around DeFi partnerships,” Leow told CoinDesk.

Digital assets on the CoinDesk 20 are mixed Monday, mostly red. Notable winners as of 21:00 UTC (4:00 p.m. ET):

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