Bitcoin’s price has fallen since early May when it failed to surpass $66,000, which dampened hopes for immediate gains after the Halving. Take to X: one analyst shared Data from the on-chain paints a nuanced image than just a loss of confidence over recent weeks.
Bitcoin Open Interest Remains Low: Bullish?
The analyst observed, using CryptoQuant’s data, that traders who use perpetual trading platforms, like Binance They appear to be closing positions rather than acquiring new ones. The reading for the month-to-month change of Open Interest is -20%.
It is clear that traders have been closing more than they are opening. It is clear that many traders have adopted a strategy of waiting and watching to see how prices will develop.
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The number of positions available has decreased.This is important because it does not mean that BTC will fall or invalidate any potential rise. Analysts interpreted the contraction of this market as traders’ cautious optimism and their refusal to exit due to negative expectations.
It is possible to separate the two postThe analyst said that Bitcoin’s market needed the current liquidation wave. “negativity” For accumulating positions. All positions open at the spot level bet on BTC continuing to fall, possibly breaking under $56,500.
![BTC long liquidation dominance | Source: Analyst on X](https://fxruhanahmed.com/2/wp-content/uploads/2024/05/1715281384_154_Bitcoin-Traders-Closing-More-Positions-As-Prices-Range-Above-60000.jpg)
But the longer the positions are the greater is the chance of an a “short squeeze” forming. The sudden spike in price will liquidate shorts, and force sellers to buy into the market again to avoid further damage.
BTC inside a trade range: will $60,000 fail or not?
Prices remain within a small range despite the possible upside indicated by data on chain. Bulls were unable to surpass $66,000 last week. This confirms the strong march since May 3.
Bitcoin is slowly moving towards the psychological $60,000. According to the price movement, a drop below this line could speed up the fall towards $56,500 that was recorded in early May.
Traders will continue to closely watch the price changes after April 20, when the crucial halving occurs. Some analysts predicted that prices would shoot up immediately after the ETFs were approved and institutions got involved.
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This hasn’t been the case. The prices continue to float despite fluctuating flows into spot ETFs and the United States Federal Reserve has not yet lowered interest rates.
Chart from TradingView, Featured image by Shutterstock
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Source: www.newsbtc.com