Most of the participants in the cryptocurrency ecosystem are quite undecided regarding their near-term outlook on Bitcoin. This is because of the mixed signals coming in from all sides as most of the indicators have been waiting for a significant move in either direction. This would entail that most of the crypto traders have been looking at multiple entry points before planning their next entry point.
A recent report from Delphi Digital has gone ahead and taken a macro look at the current price action of Bitcoin- something that has led them to quite a myriad variety of factors. This also includes lower volumes for exchange as well as increasing the strength of the US Dollar which seems to have a heavy weightage on the largest cryptocurrency in the world.
The recent drip of BTC to a sum of $31,000 has definitely added to the aura of uncertainty that currently shrouds the entire market. This has also led to market analysts putting through warnings that failure to close above a level of $31,000 would definitely see the BTC drop to a zone of $24,000.
Spot Volumes And Open Interest Collapse For Bitcoin
According to reports from Delphi Digital, there has been a marked decline in the trading activity of Bitcoin which seems to be one of the biggest factors affecting the crypto market. This is precisely due to the sell-off on the 19th of May which saw an exodus of derivatives and spot traders from exchanges.
The drop in the price of Bitcoin has also led to the tampering of the retail traders’ utilization of high leverage- especially in the derivatives market. This also implies that the proof comes directly from the futures open interest of BTC which has dropped to levels seen at the beginning of 2021. On a much more positive note, the event of mega liquidation seen previously in May does help clear out a major section of overleveraged traders- which simply means that stronger-handed participants are primarily the ones that have contributed significantly to open levels of interest.