Bitcoin is currently going through its worst time in months. Selling pressure has completely thrown the bulls off. Technical indicators indicate that the market is in control of the bears.
However, the derivatives market suggests that the bulls may still be alive.
The bulls are still here
Derivatives data from Coinglass shows optimism in market sentiment and activity. Trading volume has increased by 46.20% in the last 24 hours, reaching $87.90 billion. It is clear that traders have stepped up their activity.
However, open interest has declined by 6.66%, now standing at $29.61 billion. Such a decline usually means that traders are still closing their positions, likely due to recent market uncertainty or profit-taking after recent price moves.
Additionally, options trading is showing mixed sentiment. While options volume fell by 39.73%, options open interest rose slightly by 2.18%, suggesting that while new trades are down, existing positions remain huge.
The overall long/short ratio is 0.9168, which suggests a slight predominance of short positions. However, on major exchanges such as Binance and OKX, the long/short ratios are significantly higher (3.2176 and 2.88, respectively).
Moreover, the ratio of long to short positions (accounts) of the largest Binance BTC/USDT traders is 3.0766, and for positions is 1.7727.
Liquidation data provides another perspective. There were massive liquidations, with $49.76 million liquidated in the last hour, mostly from long positions ($49.44 million), and only $318.12 thousand from short positions.
Over the last 12 hours, $104.67 million was liquidated, with long liquidations totaling $78.58 million compared to short liquidations of $26.09 million.
Despite the optimistic sentiment in open positions, the price drop has triggered significant liquidation of long positions, which could lead to further market declines if it continues.
But the bears remain in power.
Bitcoin is trading below the Ichimoku Cloud, indicating a bearish trend. The conversion line (blue) and the base line (red) are below the cloud, further supporting the bears.
The OBV oscillator is showing a huge negative value of -110.131K and the CMF is at -0.25, indicating that money is flowing out of Bitcoin. This means that the bears are currently in control.
The ADX is at 35.94, indicating that the current trend is relatively strong. Since the price is falling and the ADX is rising, it means that the bears are actually getting stronger by the minute.
The rising ADX in a downtrend suggests that the downward momentum will continue. Bitcoin is likely to continue its bearish trend in the short term. Key support levels to watch are around $56,000.
If Bitcoin breaks below this level, the next support could be around $55,000. Resistance levels are around $59,000 and $60,000. A break above these levels could signal a potential reversal.
Report by Jai Hamid
