Bitcoin (BTC) lost nearly 10% of its value last week. According to the latest report by Bitfinex, the main reasons for this decline are aggressive spot sales and cautious attitudes of market investors.
Bitcoin price,$BTC
It has fallen sharply from $66,587, which it reached on September 27, to $60,000. Bitfinex had predicted this pullback in its previous reports, warning that the market’s high open interest (OI) levels and lack of buying in spot markets could lead to such a correction.
Impact of Spot Sales
According to the Bitfinex report, most of this 9.94% decline was triggered by spot sales. When the price fell below the $65,200 level, open positions began to be closed rapidly, and Bitcoin fell to $60,000. In particular, open positions exceeding $35 billion became unsustainable after this sharp sell-off, and the market experienced a correction.
According to Spot Cumulative Volume Delta (CVD) data, the net buying and selling balance turned significantly in favor of sellers in the last week of September. The price was 2.3% lower than in mid-September during this period, while the liquidation of long positions put additional pressure on the market.
Impact of Geopolitical Developments
Another major reason for the decline in Bitcoin prices was the rising geopolitical tensions between Iran and Israel on October 1. These tensions led investors to become risk averse and led passive investment funds to short Bitcoin and other cryptocurrencies.
On the same day, a total of $450 million worth of long positions were liquidated, the largest wave of liquidations since August. However, despite these liquidations, Bitcoin only fell 6.04%.
A similar wave of liquidations in August caused the price to drop by 15.8%, indicating that there is a high amount of bullish leveraged positions in the crypto market and their impact on the price is limited.
Future Prospects
The Bitfinex report notes that no clear directional trend has yet emerged in the market and that the market is still sensitive to news flow and economic data. In particular, the Consumer Price Index (CPI) inflation data and geopolitical developments to be announced in the coming days could lead to a new wave of risk aversion in the crypto market.
As we enter the new week, positioning in the spot market is of critical importance. Altcoins are also showing fluctuations in this process. For example, SUI gained 17% in the first days of the week, but fell 3.4% as the week progressed. Other altcoins such as XRP and APT showed movements between 15-20%, which reveals that speculative open positions are rapidly circulating in the altcoin market.