Bitcoin (BTC) Dives Below $92,000, Open Interest in Perpetual Futures Surges
Open Interest Rises by 12,000 BTC as Price Drops
The price of Bitcoin (BTC) has dipped below $92,000, revisiting levels that have proven resilient since December. This latest move comes with a notable uptick in perpetual futures open interest and price action indicating seller dominance.
According to Coinglass, the number of open futures bets or open interest in the BTC/USDT pair trading on Binance rose by roughly 12,000 BTC (worth over $1 billion) as the price fell from $96,000 to under $92,000.
Uptick in Open Interest Signals Bearish Short Positions
An uptick in open interest alongside a price decline is said to represent an influx of bearish short positions. In other words, traders likely opened fresh shorts as the price dropped, perhaps in anticipation of an extended sell-off.
Binance’s BTC/USDT Futures Price with OI and CVD
[Figure: Binance’s BTC/USDT futures price with OI and CVD. (Coinglass)]
The cumulative volume delta (CVD) across both futures and spot markets on the exchange was already negative and has deepened further with the price drop, indicating that selling pressure has outpaced buying activity. The CVD measures the net capital flows into the market, where positive and rising figures indicate buyer dominance, while negative values reflect increased selling pressure.
BTC Chalks Out Bearish Marubozu Candle
Bitcoin dropped 4.86% on Monday with sellers dominating the price action throughout the day. That’s reflected in the shape of Monday’s candlestick, which features negligible upper and lower shadows and a prominent red body. In other words, opening and closing prices are almost the same, a sign that buyers had little say in the price action.
[Figure: BTC’s daily chart. (TradingView/CoinDesk)]
The appearance of the bearish candlestick while prices hover below key 50- and 100-day simple moving averages (SMA) may embolden sellers, potentially leading to deeper losses.
Support and Resistance Levels
Support is seen near $89,200, the Jan. 13 low, followed by the 200-day SMA at $81,661. On the flip side, the Feb. 21 high of around $99,520 is the level to beat.
Conclusion
The recent price action in Bitcoin has led to a surge in perpetual futures open interest, indicating a growing bearish sentiment in the market. As the price continues to hover below key SMA levels, it’s essential for investors to remain vigilant and adapt their strategies accordingly.
FAQs
Q: What is the current price of Bitcoin?
A: The current price of Bitcoin is below $92,000.
Q: Why is the perpetual futures open interest surging?
A: The perpetual futures open interest is surging due to a significant increase in bearish short positions.
Q: What is the current sentiment in the market?
A: The current sentiment in the market is bearish, with sellers dominating the price action.
Q: What are the key levels to watch?
A: The key levels to watch are the 50- and 100-day SMAs, as well as the support and resistance levels at $89,200 and $99,520, respectively.
