The broader crypto market cap takes a turn for the worse with its improbable volatility. An abrupt crypto crash on Thursday has resulted in negative gains of over 7.37% round the clock. Thereby, plummeting the global market cap to a 5-month low of $1.726 trillion. The market representatives Bitcoin and Ethereum are down by 7.29% and 8.26% in the past 24 hours.
Especially, the flagship asset appears to undergo little more correction as open–interests are still at their ATH. Moreover, extended stretches of the negative crowd sentiments are likely to continue.
But every time Bitcoin price breaks outside the bands, it has always resulted in fakeouts to create trend reversals. Hence, if it loses $3000 more, not to be panic, it is feasibly a sign of a bullish move ahead.
Bitcoin Open Interest Flash Crash Ahead!
Although there have been record-breaking liquidations of $121.68 million over the past 24 hours, still there are no signs of sellers getting exhausted. On the other hand, there is still a lot of Open Interest left out in the market and hence correction outside the bands is no more a surprise.
Analytics from the Glassnode reported that Bitcoin futures open interest is at an ATH and 42% of rising in the same since December 4th. With longs and shorts getting liquidated in large numbers, only a small dent in total Open Interest was made. Hence, an open interest flush would result in a hefty correction which would also take the price below $35k eventually.
Recent analytics of Santiment revealed that negative crowd sentiment in August-September has resulted in a prolonged bear cycle of over two months. However, extended stretch uplifted the price action from just $40k to $69k in November. Hence, the current extended stretch since December would optimally boost the price action from February’s first week.
Collectively, there is no need to be panic BTC returns are over 47.5x higher than the S&P 500 over the past 5 years. And 84.5x more than the price of Gold. In addition, despite negative sentiments, the flagship asset has decoupled its move from Nasdaq. Hence, if extended negative sentiments continue and open interest gets flushed out in the next couple of days or weeks, Bitcoin price can undergo a gigantic rally.
Source: https://coinpedia.org/bitcoin/btc-price-going-to-correct-below-35k/