- Money flowed out of BTC contracts, suggesting that the price might fall to $65,000.
Social dominance dropped to 7.07%, indicating that attention was moving to other cryptocurrencies.
As a seasoned crypto investor with a keen interest in market trends and on-chain data, I’m keeping a close eye on Bitcoin (BTC) after noticing some concerning developments. The recent decline in Bitcoin’s Open Interest from $11.75 billion to $10.77 billion in just one day indicates that money is flowing out of BTC contracts and traders are closing their positions. This trend is bearish, as it suggests a lack of new money entering the market.
I recently discovered that the total value of Bitcoin open interest decreased by nearly a billion dollars between May 23rd and 24th, as I closely monitored this crucial metric using Santiment’s on-chain data.
Twenty-third’s day saw Bitcoin’s Open Interest (OI) reach an amount of $11.75 billion. However, by the time of this writing, the OI had dropped to $10.77 billion. Open Interest refers to the total value of open positions in a contract.
As a crypto market analyst, I can tell you that every transaction in the crypto world involves two parties: a buyer and a seller. When the open interest (OI) metric rises, it signifies that fresh capital is flowing into the market, specifically supporting the buying side.
Decreasing attention may nuke BTC again
As a researcher observing market trends, I’ve noticed that a significant upward trend in a particular metric is often indicative of a bullish outlook. However, if this metric reaches unusually high levels, the Open Interest (OI) could potentially signal bearish tendencies. Conversely, a decrease in Open Interest implies an increase in closed positions, which can favor sellers in the market.
Based on the data presented, it appears that the majority of traders have been reluctant to open new positions for Bitcoin. This trend has historically been a bearish indicator for Bitcoin’s price, which may explain its recent downward trend.
At the moment of publication, the price of Bitcoin was $67,123, marking a 3.52% drop over the past 24 hours. The decrease in open interest for Bitcoin might be one reason for this decline, but another possible explanation is the recent approval of Ethereum spot Exchange-Traded Funds (ETFs).
Based on my findings from AMBCrypto’s investigation, it appeared that traders were shifting their funds towards ETH and other alternative coins. If this trend continues, Bitcoin’s price may continue to decline, potentially reaching $65,000 in the near term.
Lately, we shared that Bitcoin’s value might decrease prior to reaching $70,000 again. This implies that the forecast could potentially be unfolding as we speak.
Watch out! A bounce may be coming
One method to express this is: The social influence of Bitcoin, as represented by its social dominance metric, has significantly decreased. Currently, it stands at 7.07%, down from a high of approximately 28% previously.
A drop in this indicator signifies that cryptocurrency-related conversations have decreased, indicating a shift in market focus towards other areas.
If social dominance keeps decreasing, it’s possible that the predicted price of $65,000 for Bitcoin (BTC) may materialize. Yet, a more pronounced decrease might signal a price bottom instead.
Additionally, Bitcoin’s Funding Rate stood at 0.01%. The term “Funding Rate” represents the expense of maintaining an open contract within the market. When the Funding Rate is positive, it implies that the contract price trades above the spot value.
Read Bitcoin’s [BTC] Price Prediction 2024-2025
As a crypto investor, when the funding rate turns negative, I interpret it as the contract price being less expensive than the current market index price. Given that the funding is declining and the price is dropping, Bitcoin’s near-term trend might continue to be bearish.
However, it might not take a long while before the price rebounds.
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2024-05-25 00:07