Bitcoin Drop Halves Open Interest, Market Analysts Call for Prudence

Bitcoin has gone down sharply, thereby destabilizing the entire crypto market. Prominent analytical service CryptoQuant pointed out in a recent post

Bitcoin's recent sharp decline has had a destabilizing effect on the entire crypto market, with a 16% drop in a single day and a 30% decrease from a recent high in the shorter-term trend. This rapid decrease led to the reduction of 5,500 BTC long positions in the next 24 hours, valued at $303 million using the hourly closing rate.

Prominent analytical service CryptoQuant pointed out in a recent post on X that Bitcoin is set for a tumble alongside global stock markets. The downturn in the market is highlighted by the fact that Bitcoin failed to maintain its momentum after declining by 16% in a day. This slump is significant in comparison to the single-day drops of 10-12% that occurred during the crypto bear market of 2018.

The effects of Bitcoin's free-fall in the given period became even more pronounced within the crypto market as a whole. The market's open interest on major exchanges such as Binance, Bybit, and OKX, which control a vast share of the market's open interest, fell down to almost half of the prior level. This decrease in open interest demonstrates that the market has been severe in its response to Bitcoin's slide down.

Further exacerbating the effects in the market, critical trend lines are at risk. The high in January at $48.9K had also not been maintained. The levels and the consolidation range during February at $51-52k are crucial support levels.

Such levels on CryptoQuant present a risk to the realized price for long-term holders (LTH) if broken. Regarding the 2018 mini-cycle, this situation creates great pressure on the Bitcoin market, which struggles to level its fluctuations, alongside fears for the currency’s future development.

Such supports are closely watched by market analysts, as the violation leads to the further bears, the level of investor confidence is undermined even more. Such expectations are pretty evident among traders, who tend to avoid more losses and fixate upon resisting considerable declines for a long time.

As a result of such a heavy slump, market participants are now calling for prudence. As a result, the investors are asked to keep abreast with development continue to learn and be ready to operate in conditions of higher risk and volatility. The next few days will be probably decisive for the Bitcoin prices to trade above or below the support levels.

The above is the detailed content of Bitcoin Drop Halves Open Interest, Market Analysts Call for Prudence. For more information, please follow other related articles on the PHP Chinese website!