Bitcoin's (BTC) struggle to remain above $70,000 continued into Wednesday, raising concerns that a decline into $60,000 may very well be the following stop. The selloff was accompanied by liquidations in futures markets, a $55 billion drop in BTC Open Interest (OI) over the past 30 days, and rising Bitcoin inflows on exchanges.
Due to the worth weakness, analysts are debating whether crypto-specific aspects or larger macroeconomic issues are the driving factor behind the sell-off and what this might mean for BTC's near-term future.
Key Takeaways:
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Around 744,000 BTC in open interest left major exchanges inside 30 days, which is reminiscent of about $55 billion at current prices.
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BTC futures cumulative volume delta (CVD) has declined by $40 billion over the past 6 months.
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Crypto exchange reserves have increased by 34,000 BTC since mid-January, increasing near-term supply risk.
Bitcoin weekly chart. Source: Cointelegraph/TradingView
The collapse in BTC open interest suggests large-scale deleveraging
Data from CryptoQuant shows that Bitcoin's 30-day change in open interest shows a pointy decline across exchanges, driven by widespread position closures and not only freshly opened short positions.
On Binance, net open interest fell by 276,869 BTC over the past month. Bybit recorded the most important decline with 330,828 BTC, while OKX recorded a decline of 136,732 BTC on Tuesday.
In total, around 744,000 BTC value of open positions were closed, which is reminiscent of greater than $55 billion at current prices. This drop in open interest coincided with Bitcoin falling below $75,000, suggesting that deleveraging is a driving factor, not only spot sales.
Bitcoin Open Interest 30D Change. Source: CryptoQuant
Onchain analyst Boris highlighted that cumulative volume delta (CVD) data shows that sell orders proceed to dominate the market, especially on Binance, where derivatives CVD was near -$38 billion over the past six months.
Other exchanges show different dynamics: Bybit's CVD fell to almost $100 million after a pointy wave of liquidations in December, while HTX's CVD stabilized at a CVD of -$200 million while the worth consolidated around $74,000.
Increased forex flows add pressure as analysts eye key levels
Meanwhile, Bitcoin inflows to exchanges surged in January, reaching around 756,000 BTC, led by Binance and Coinbase. Since the start of February, inflows exceeded 137,000 BTC, highlighting traders' repositioning and never necessarily a withdrawal from the market.
On the provision side, analyst Axel Adler Jr. noted that foreign exchange reserves have increased from 2.718 million BTC to 2.752 million BTC since January nineteenth. The analyst warned that sustained growth above 2.76 million BTC could increase selling pressure. The analyst assumed that a full capitulation remains to be pending, which could occur at lower cost levels.
Bitcoin exchange reserves. Source: CryptoQuant
Market analyst Scient said Bitcoin is unlikely to bottom in a single day or week. Permanent market lows can develop through two to a few months of consolidation near key support zones with higher timeframe indicators. Scient noted that it stays unclear whether this structure will form within the high $60,000 region or the low $50,000 region.
Bitcoin trader Mark Cullen continues to see a possible downside towards $50,000 in a broader macro scenario, but expects a short-term return to the local control point ($89,000-$86,000) after BTC broke the weekly low below $74,000 on Tuesday.
Mark Cullen's LTF BTC evaluation. Source: X
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