As the virtual currency market becomes increasingly bearish, bitcoin price fell again and approached the $80,000 level again. With the current price decline, the BTC derivatives market is showing a bearish performance, suffering one of the steepest declines in the ongoing cycle.
Bitcoin bulk derivative unwind
In an unstable situation, Bitcoin Open Interest (OI) The market contracted sharply, as if the speculative framework that had supported it was suddenly removed. This sharp drop in open value came after a sudden drop in BTC price, losing the $91,000 mark it had previously regained.
a report According to Darkfost, market expert and author at CryptoQuant, open interest has been cut in half, indicating a dramatic shift in investor sentiment and behavior. With most of the leverage evaporated, the market is currently unusually quiet while preparing for the next decisive trigger.
Dirkforst emphasized that leveraged positions in Bitcoin continue to rise. be liquidated or intentionally closed. Despite the recent decline in BTC prices, traders’ enthusiasm to increase their risk exposure during this period of uncertainty has not increased.
Currently on the market risk-off attitudethis trend is understandable considering the current state of the crypto environment. As a result, BTC’s open interest has cleared a whopping $20 billion. Data shared by experts shows that the main indicator decreased from 47.5 billion BTC to 28.35 billion BTC between October 6 and December, representing a decrease by half during the period.
Experts say this is the worst flush in the current cycle and in Bitcoin’s history since derivatives markets became available. “I continue to say that the derivatives market has had a huge impact on Bitcoin and is the biggest driver,” Dirkforst said.
BTC loss rate reaches historic levels
As Bitcoin prices continue to fall, short-term BTC holders are feeling the weight of the down market. These holders are also called: individual investorrealized a significant loss from the position.
darkforest the study Based on spot market only. His objective is to identify a very specific group of investors who speculate in the short term. With a realized price of $113,692, 1-3 month BTC holders are currently experiencing the largest percentage loss of the ongoing market cycle.
Over the past two weeks, this group of investors has averaged unrealized losses of 20% to 25%. In his cycle, these stages have been associated with the formation of the bottom. This is because cohorts often have to choose between two actions: sell or hold.
If most of these occur; traders are surrenderingAs observed in recent weeks, this is usually the moment when the opportunity to accumulate BTC becomes more interesting. However, if the bullish trend holds in the long term, this setting will be valid and Darkhost will express confidence for the time being.
Featured image from Pngtree, Chart from Tradingview.com
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