Bitcoin open interest dives, but bottom could see ‘renewed bullish trend’
Analysis
Price Impact
HighA sharp decline in bitcoin's open interest, the 'sharpest 30-day drop of the cycle,' is often a 'cleansing phase' that historically forms a solid bottom for a renewed bullish trend. this deleveraging reduces speculative exposure, setting the stage for significant price movements.
Trustworthiness
HighThe analysis is based on data from cryptoquant by analyst 'darkfost' and corroborated by 'michaël van de poppe,' both reputable sources in the crypto analysis space. the methodology of analyzing open interest and deleveraging for market bottoms is a well-established technical indicator.
Price Direction
BullishDespite recent price declines and panic, the significant deleveraging due to falling open interest is seen as a necessary market rebalance that could lead to a 'renewed bullish trend.' a sustained move above $90,000-$96,000 is cited as a key indicator for a potential surge towards a new all-time high (ath).
Time Effect
LongThe formation of a 'solid bottom' and the commencement of a 'renewed bullish trend' following a major deleveraging event typically indicates a mid to long-term market shift rather than an immediate, transient effect. the comparison to the 2022 bear market also suggests a more extended recovery phase.
Original Article:
Article Content:
Brian Quarmby 3 minutes ago Bitcoin open interest dives, but bottom could see ‘renewed bullish trend’ Bitcoin open interest has seen a sharp decline in the last month, which one analyst says could form a “solid bottom” for it to climb back from. Listen 0:00 33 News COINTELEGRAPH IN YOUR SOCIAL FEED Bitcoin open interest has dropped off as the cryptocurrency’s price has slid over the past month, which an analyst argues could see Bitcoin hit a bottom and spark a “renewed bullish trend.” Open interest in terms of Bitcoin ( BTC ) has seen its “sharpest 30-day drop of the cycle” at around 1.3 million BTC, currently worth $114 billion with Bitcoin trading at $87,500, analyst “Darkfost” posted to CryptoQuant on Sunday. The cascading price of BTC over the past few weeks “continues to trigger liquidations,” pushing traders to double down or readjust their strategies. However, it now appears investors are halting futures trading to “reduce risk exposure. “Historically, these cleansing phases have often been essential to forming a solid bottom and setting the stage for a renewed bullish trend. Deleveraging, forced closures of overly optimistic positions and a gradual decline in speculative exposure help rebalance the market.” Darkfost noted that the last time Bitcoin open interest fell so quickly over 30 days “was during the 2022 bear market, which highlights how significant the current cleanup really is.” Open Interest 30 day change. Source: CryptoQuant Bitcoin has declined by 20% over the past month and has seen a decline of over 30% since hitting a peak of over $126,000 nearly two months ago in early October. Bull market could return with climb above $90,000 Crypto analyst and MN Fund founder Michaël Van de Poppe argued this coming week is going to be “decisive” for the price of BTC and chances of it hitting a new all-time high in the near future. Related: Bitcoin volatility surge may signal return to options-driven prices: Analyst In an X post on Sunday, Van de Poppe said that if BTC can surge back and stay between the region of $90,000 to $96,000, “then the chances of a revival toward a new ATH have significantly increased.” “Fear and panic are max during the past days. Those are the best opportunities in the markets,” he said. Magazine: Bitcoin $200K soon or 2029? Scott Bessent hangs at Bitcoin bar: Hodler’s Digest, Nov. 16 – 22 # Bitcoin # Bitcoin Price # Bitcoin Analysis # Price Analysis Add reaction