BTC price nurses 5% dip amid warning Bitcoin can still ‘flush’ to $60K
2024.10.26 08:47
Bitcoin (BTC) circled $67,000 on Oct. 26 after news events sent BTC price tumbling nearly 5%.
BTC/USD 1-hour chart. Source: TradingView
Bitcoin open interest blamed as BTC price wobbles
Data from Cointelegraph Markets Pro and TradingView tracked local lows of $65,530 on Bitstamp into the Oct. 25 daily close.
These came along with fresh geopolitical instability and unsubstantiated reports surrounding illicit use of largest stablecoin Tether (USDT).
While the latter quickly brushed off the accusations, which appeared in the Wall Street Journal, conflict between Israel and Iran increased the risk-off mood.
For Bitcoin market observers, however, there was a more important factor in recent BTC price performance: open interest (OI).
“Now most people say that the cause of the drop was because of some US investigation over the USDT stablecoin, which in fact couldn’t be further from the truth. Over the last months we had relentless narratives both in top ranges, as well as in bottom ranges, making people become emotional each time they should’ve made a decision,” popular X account Luca responded on X.
“In my opinion, the drop wasn’t caused by the news. The drop was caused by the high OI, which market makers are trying to flush out before they take the price higher.”
Bitcoin futures OI 1-day change. Source: Glassnode
Data from onchain analytics firm Glassnode showed the single-day OI decrease on Oct. 25 as the largest since August.
“Blows my mind that Bitcoin still trades like a risk asset. Bitcoin will trade like Gold in these events one day,” Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, commented.
“On the plus side, 10000 BTC Open Interest wiped in minutes, we are now back at the same level of OI as when Bitcoin was trading at $59K.”
As Cointelegraph reported, OI had previously reached record highs of over $40 billion as BTC/USD sought a rematch with $70,000.
$60,000 liquidity “flush” next?
Continuing, Luca joined those anticipating a fresh drop toward significant psychological support at $60,000.
Related: Bitcoin analyst: $100K BTC price by February ‘completely within reason’
“If we look on the Liquidation-Heatmap, we can clearly observe how bulls tried to catch the local bottom this whole week, failing each time, as there were highly leveraged positions,” the X post continued, referring to exchange order book liquidity.
“Now it is happening again, with a MASSIVE pile of longs sitting just under 65K, which is also a very important support level. Lose that, and the next support range at 60K gets exposed.”
BTC liquidation heatmap. Source: CoinGlass
Monitoring resource CoinGlass showed bid liquidity stacked below spot price toward $61,500.
“Now that is what I personally think it’s going to happen, we will most likely see another flush to 60K, before we can call for any local-bottoms,” Luca concluded.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
