Analysts say that Bitcoin’s open positions “will give way to further gains”
The weekend is approaching, and fear is still the main short-term sentiment in the cryptocurrency market. Bitcoin earlier today (Bitcoin) The price fell to US$47,250, and data from the US Consumer Price Index (CPI) showed that the inflation rate reached 6.8% hit a 40-year high.
Data from Cointelegraph Markets Pro and Transaction view Indicating that the bulls’ efforts to reclaim the $50,000 support level in the midday were easily defeated, and sellers dropped the price below $48,000, which may force the top-ranked cryptocurrencies to lower their daily highs again.
With the prospect of a sharp price increase at the end of the year almost dashed, traders have turned their attention to managing risk and determining the optimal level of bargain hunting. The following are analysts’ views on the prospects for Bitcoin to enter 2022.
The disappearance of open positions “will give way to further rises”
As seen in the previous rapid decline in BTC prices, a recent Delphi Digital report emphasized that BTC open interest (OI) on derivatives exchanges has dropped significantly. The report pointed out that after the recent market downturn, OI fell by 50% due to a reduction in over-leveraged long positions.
Although this experience may be unpleasant for overexposed traders, analysts say that deleveraging events like this are beneficial in the long run and often “give way to further gains” because The previous bubble and excessive prosperity were replaced by a more deliberate trading environment.
Delphi Digital stated that the sharp drop in OI in the past month may also indicate that BTC’s short-term bottom may have bottomed, and the current sell-off may have reached the point of exhaustion.
Delphi Digital said,
“BTC’s OI has fallen for 30 consecutive days at a level that previously indicated that a bottom is forming (or not too far).”
BTC range trading before 2022
according to For Ben Lilly, co-founder of Jarvis Labs, the price of Bitcoin may “stay within this trading range at least until the end of this month”, mainly because December 31 marked the “largest open position” public contract Terms. “
As part of the reasoning, Eli Lilly highlighted the previous major retracements that led to a large number of liquidations. He explained that after these corrections, the market usually takes some time to build momentum.
“Fortunately, this is a great setting for anyone who wants to increase their holdings every week or at the bottom of the current trading range.”
Should traders look for the continuation of the uptrend?
The analyst and pseudonym Twitter analyst “Rekt Capital” provided the last point of insight. He Post Below is the BTC price trading chart between two key exponential moving averages.
Rekt Capital said,
“In general, BTC is currently being integrated within two key EMAs. Just like May 2021. Just like May… The price between these two EMAs continues to stabilize and the integration will rise in the new macro Before the trend continues.”
The overall cryptocurrency market value is now $2.238 trillion, and Bitcoin’s dominance rate is 40.7%.
The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.