Bitcoin fell below $60,000 again. This is yet another sign of the future. At press time, Bitcoin traded at $60,800 by market cap, with a loss of 5% in the daily charts.
Although Bitcoin has shown some signs of recovery, it registered an approximate correction of 12% to its peak. The increase in selling pressure led the entire cryptocurrency market to dive.
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Arcane Research data shows that the general mood in markets has changed to one of extreme greed and to another of normal greed. Although the market correction has been significant, operators and traders remain positive about new highs.
As Bitcoin falls to a low range of $58,000-$70,000, this metric may continue to drop. This will likely be the hardest hit sector in derivatives.
As NewsBTC reported, Bitcoin futures contracts across the board got overheated as BTC’s price pushed into uncharted territory. The result was a surge in funding rates and liquidity at low levels.
In other words: Large investors drove the price to $59,000 because they wanted liquidity. This was the result of traders taking long over-leveraged positions with more upside.
Nearly every cryptocurrency exchange platform has seen funding rates return to neutral after the crash. Arcane Research has provided market sentiment. The Bitcoin price remained stable at $58,6000. This suggests there is a possible bottom, at least in the short term.
Data provided by CryptoQuant records over $33 million long liquidations in one hour as BTC’s price went below its current levels. In the last day, Open Interest decreased by 3.3% or approximately $350 Million.
Glassnode has provided further data showing that the OI of Bitcoin Futures contracts dropped to $711 951,837, which is a five-month low. This was according to crypto exchange Bitmex. Below you can see that there was more BTC appreciation before a drop in OI between September and October.
📉 #Bitcoin $BTCFutures Open Interest has fallen to $711,951,837.33 in the past five months. #Bitmex
On 24 September 2021, a previous 5-month low was $713.112,500.
View metric:https://t.co/GyObF5WOjC pic.twitter.com/bsa9S166ZP
— glassnode alerts (@glassnodealerts) November 16, 2021
Is Bitcoin ready to go?
Data from Whalemap suggests that Bitcoin whales might try to drive the price lower to exploit the liquidity around $57,000.
In addition, the apparent indirect correlation between BTC’s price and the U.S. Dollar (DXY Index) could create more hurdles for the bulls. Recently, the dollar broke through a significant resistance zone to reach a record 16-month high.
These macroeconomic factors could have caused the rally, such as the tapering of the U.S. FED’s and increased risks in Asian markets from the Evergrande crises.
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All of this adds to the market’s already uncertain state. One thing seems true, BTC’s price must hold at $58,000 if it wants to return to price discovery in Q4, 2021.
