Bitcoin (BTC) sellers put their hopes on continue to see prices below USD 10,000 after halving based on five key futures market metrics.
The five measures are open interest, financing, long and short deltas, declining divergences and liquidity hoarding of USD 10,000.
Stagnating open interest in important Bitcoin futures exchanges
Open Interest – the total number of open long or short contracts on the market – of Bitcoin futures contracts on BitMEX, Binance Futures, Bybit and other futures exchanges struggles to raise.
On May 10, when the price of Bitcoin dropped abruptly from $ 9,570 to $ 8,100 at BitMEX just a few hours before the cut, around $ 200 million in long positions were settled in an hour.
At this moment BitMEX’s open interest fell significantly as many long contracts were either liquidated or forced to adjust their positions.
On May 14, the price of Bitcoin was also declined at $ 9,900, falling to $ 9,200 overnight. The rapid withdrawal resulted in a $ 42 million settlement. At least $ 270 million in long contracts were processed on BitMEX within five days.
Bitcoin declines $ 10,000 and $ 9,900. Source: trade view
After the two massive sales, the appetite of investors on the futures market apparently went back to trading. Maybe This could indicate that buyers are showing signs of exhaustion as selling pressure increases to an important resistance level of $ 10,000.
Imbalance in long and short contracts
On the three most important futures exchanges Bitfinex, Binance Futures and BitMEX Long contracts make up approximately 72.37% of total open positions.
Until May 15, approximately $ 661.7 million is open in long positions, but only $ 252 million in short positions. The large gap between long and short contracts in a multi-year resistance area makes Bitcoin vulnerable to a possible bullish contraction.
Total long and short bitcoin contracts on the market. Source: Block Whisperer
Last week Bitcoin recorded two major bullish contractions in a short space of time. However, the market is still fluctuating heavily towards long contracts, which means that there is enough liquidity available in the mid-$ 9,000 range.
Bearish deviations occur
The Relative Strength Index (RSI) is a pulse oscillator that measures whether Bitcoin is overbought or oversold.
According to a technical analyst called “CryptoCapo” If Bitcoin’s RSI decreases as price increases, it is considered a bearish divergence.
A declining divergence due to an expanded price movement suggests a significant correction.
Bitcoin shows a bearish divergence. Source: CryptoCapo
A decline in the RSI and a slowdown in the volume of Bitcoin on both the futures market and the spot market could lead to weakening momentum in the short term.
The liquidity was approximately USD 10,000
For large traders, liquidity in a relatively small market is critical. Bitcoin’s price generally moves in extreme cycles as whales seek liquidity at a significantly low or high price.
When the price of Bitcoin rose from $ 9,000 to $ 10,000 and was declined shortly afterwards, BTC placed major sales orders mainly with OKEx and BitMEX.
Absorbing sell orders in a fundamental resistance area and two sudden rejections within five days increases the likelihood of a sustained downward trend.