Analysts at crypto exchange Bitfinex said last week's nearly 10% plunge in Bitcoin was a “healthy readjustment” and the risk of a sudden drop in the coming days and weeks should decrease. Ta.
October 6th reportAnalysts at Bitfinex say that the drop in Bitcoin (BTC) price to the $60,000 support zone, along with several other important technical factors, is a strong indicator of declining volatility. Ta.
Bitcoin rose to $66,600 on September 27th. Still, market optimism quickly waned as rising geopolitical tensions in the Middle East and concerns about the strength of the US economy erased risk appetite.
Bitcoin fell 9.94% from peak to trough from September 27th to October 4th, indicating spot investors' “cautious sentiment” towards high price levels.
Bitcoin's rising highs are a strong indicator that downside volatility is being contained. Source: Bitfinex
Bitfinex analysts speculate that buyers may still seek to consolidate larger amounts of Bitcoin at lower prices.
“The market has seen a healthy readjustment as Bitcoin experienced four consecutive days in the red for the first time since early August.”
The resulting decline saw Bitcoin's open interest shrink from $35 billion to a more “stable” $31.8 billion, Bitfinex said.
Furthermore, on October 1st, $450 million worth of long positions were liquidated during the decline, indicating that the market was heavily skewed toward upside.
“The significant size of this liquidation amount relative to the price decline indicates long-term biased leveraged positioning in the crypto market as it moves above $65,000, an important technical and psychological level. ” wrote the analyst.
Related: Bitcoin ETFs see biggest outflow in a month as Middle East tensions rise
The market was largely supported by strong U.S. labor data in September and October, the report said. He added that the Federal Reserve is expected to cut interest rates again in November, which should restore widespread optimism on risks.
Looking ahead, the report said that the recent upward movement in Bitcoin, which saw it rebound to $62,650, has seen a return of “spot buying”.
Still, analysts said it was too early to draw “final conclusions” about the near-term direction of the market.
“With the market remaining reactive, clues regarding the future direction of BTC and the market as a whole may lie in the positioning seen in the early week trading sessions, especially in the US,” the report said. There is.
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