Bitcoin price rose to a high of $64,448 on Monday, Oct. 7, before the market fell 4%. On the 4-hour chart, BTC is currently oscillating above the 200-day moving average.
Bitcoin OI surges, price falls
Currently, Bitcoin is trading below $62,000, a level that futures traders may see as a potential shorting opportunity. In the last four hours, we have observed a steady decline in the market price of Bitcoin as the number of open interest (OI) has risen. In addition, while the funding rate remains in the positive territory, the total spot market volume (CVD) on exchanges has continued to decline, a sign that spot traders are also reducing their holdings of Bitcoin.
A comprehensive analysis of the above data leads to a reasonable inference: permanent buyers are currently in a state of "disbelief", which means that they are indifferent to the downward trend of prices.
CVD data shows that spot traders are active sellers, while futures directly determine price movements. Therefore, the current sentiment among futures traders is short-term bearish.
However, this particular increase in OI is a bit abnormal for Bitcoin. Bitcoin analyst and trader Byzantine General noted,
“$BTC open interest is spiraling out of control and the price isn’t even moving. $ETH and $SOL are starting to rise now too. This doesn’t make sense unless there is some inside info here.”
BTC fractal hints at liquidity rush to $57,500
Market fractals are historical repeating patterns that allow traders to identify trend direction or reversals in a chart. With this in mind, professional trader Justin Bennett highlighted a Bitcoin fractal that reflects its Q3 behavior.
Bennett said that Bitcoin is currently in a downward channel. Therefore, the liquidity rush may reach around $64,000, followed by a further decline to $60,000 at the end of October, and then to around $57,000.
Bitcoin is still in “no man’s land”
As mentioned earlier, Bitcoin is currently trading in a range of $62,600 to $61,800 on the 4-hour chart. A successful break above $62,600 could add more validation to the uptrend and align with the bullish pattern on the higher timeframe (HTF).
Further, if Bitcoin can close above $62,600, it will re-occupy the favorable position above the 50-day exponential moving average (EMA), which will provide it with stronger momentum for a further breakout above $64,000.
Taking all of the above into account, there is still a chance that Bitcoin could drop to $60,000 in the coming days.
While an immediate rebound from the $60,000 demand zone will be bullish, further sideways movement and consolidation around $60,000 will increase the possibility of a drop to between $57,500 and $54,000.
As Cointelegraph reported, several potential price triggers could occur throughout October.
