2024-10-8 01:00 |
Bitcoin’s (BTC) nearly 10% drawdown last week was a “healthy realignment” that reduced the risks of abrupt price swings in the coming days, according to the latest “Bitfinex Alpha” report.
The pullback, ignited by escalating tensions in the Middle East, briefly took BTC below the $60,000 level before the market stabilized. This caused perpetual contracts’ open interest (OI) to shrink from an overheated $35 billion to a more stabilized $31.8 billion zone.
Notably, the drop in OI correlates with increased spot market selling, triggering a series of long liquidations. The price initially lost its crucial support level at $65,200, followed by a sharp decline as traders exited their positions.
According to the report, the pullback and the decline in OI suggest the market is attempting to find balance. Although the movements are reactionary, the current market forces appear to be stabilizing as traders adjust their positioning.
Uncertain outlookBitcoin rebounded to the $62,500 price area on Oct. 4, spurred by positive US labor market data. This recovery also supported gains in select altcoins, like Dogwifhat (WIF) and Solana (SOL).
Despite the upward momentum, the Spot Cumulative Volume Delta (CVD) metric remained subdued, suggesting a lack of aggressive buying activity in the spot market. Thus, the outlook for Bitcoin and the broader crypto market remains uncertain, and dependent on several factors.
The report noted that upcoming Consumer Price Index (CPI) inflation data and ongoing geopolitical tensions will play critical roles in shaping Bitcoin’s direction.
Additionally, spot traders’ positioning at the start of the week will be crucial in determining the next movement, as early-week sessions often provide insights into broader market sentiment.
The post Bitcoin’s latest dip below $60K signals market stabilization amid geopolitical tensions – Bitfinex appeared first on CryptoSlate.
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