During the brief surge in selling pressure, more than $1.28 billion worth of Bitcoin was traded, despite recent cryptocurrency market performance being relatively stable. The market was rocked by this unexpected sell-off, especially as open interest in platforms like Binance dropped sharply.
As Bitcoin’s price reached $64,800, more long positions entered the market, ultimately making the situation worse. Based on the data, many traders were overly optimistic as Bitcoin approached the $64,800 mark. In anticipation of a breakout to higher levels, there was a significant influx of long positions.
But once Bitcoin failed to continue its upward trajectory, that optimism gave way to fear. The subsequent sell-off wiped out about 4,000 BTC from Binance futures open interest, contributing to the overall bearish sentiment in the market. The sharp decline in open interest is notable as it highlights the decline in leveraged positions.
Excessive long leveraged positions can lead to market instability, as even a small decline in prices can trigger a wave of liquidations. In fact, the price of Bitcoin fell more quickly and sharply than expected as a result of a wave of liquidations caused by the drop in value.
Serious concerns about who is selling come from the $1.28 billion selloff and drop in open interest. Large institutional investors, or whales, may be taking profits at significant resistance levels such as $64,800. These large players often sell assets, recognizing that much of the market is overleveraged and allowing them to sell at premium margins.