BTC price has recovered more than 22% two weeks after bottoming at $52,546, reaching around $64,121 on September 20. Currently, Bitcoin price has dropped to $62,900, with many technical and on-chain indicators warning about the strength of the recent rally.
Factors That Could Push Bitcoin Price Lower
85% of Bitcoin Investors Are Now Profitable
Bitcoin's recent surge above $62,000 has pushed the BTC price above the strike price of short-term investors, as the group turned some unrealized losses into profits.
A chart by market analytics firm Into The Cryptoverse shows that only 14.2% of Bitcoin investors were losing money as the price hovered around $62,600 on September 20, while more than 85% of the supply was in profit.
The percentage of supply that is profitable and unprofitable is assessed based on the total number of unspent transaction outputs (UTXOs), comparing the price between the last move and the current price. If Bitcoin continues to rise from its current level, the number of profitable investors will increase. However, an overheated market is often considered a sign of an impending price correction. Due to this on-chain signal, the price of Bitcoin is likely to decline in the coming days as investors take profits.
Bitcoin Futures Interest Soars
During August, Bitcoin futures open interest (OI) surged, peaking at $34.72 billion on August 27. However, the price failed to break above the $65,000 resistance level and subsequently fell 20% within 10 days.
Similarly, with the latest rally above $64,000, open interest has increased 22.7% since September 8 to a four-week high of $34.72 billion on September 20, according to data from Coinglass. The strong demand for BTC futures has investors concerned about the possibility of a similar price drop as late August.
Some traders believe that the increase in Bitcoin futures open interest indicates excessive borrowing. Large open interest can increase price volatility, especially when traders hold multiple positions and suddenly adjust their strategies. It also affects the overall sentiment of traders who use open interest as a signal to decide whether to hold or sell their crypto assets.
Bitcoin Price Meets Resistance At $64,000
From a technical perspective, Bitcoin price is facing strong resistance at $64,000. When the price rejected this level on August 25, it fell 17.5% to $52,546, indicating that bears are actively defending this area. Bitcoin bulls need to create a decisive daily candle close above this level to sustain the recovery momentum.
Conversely, if the $66,000 level fails to turn into support, the price could drop lower, with liquidation of long positions dragging the price towards $62,000.
Data from Coinglass shows a wall of sell orders forming above $64,000, reinforcing the importance of this resistance area.
