Bitcoin price struggles to sustain above $41,000 as whales strategically position for next BTC move

Fonte Fxstreet
  • Bitcoin price is trading sideways above $41,000 on Monday, after a weeklong decline. 
  • Whales on a leading crypto exchange have closed their leveraged positions, leading to a significant increase in USDT reserve. 
  • Whale’s strategic moves usher a 21% decline in Open Interest on Bitfinex signal that a shift in BTC price trend is likely. 

Bitcoin price declined throughout last week. The largest asset by market capitalization, is struggling to keep its head above volatile waters, at $41,000. At the time of writing, BTC price is $41,101. Crypto analysts expect a bounce from the current price level, if the asset fails to rally, further correction in BTC price is likely. 

Whales on one of the largest derivatives exchange, Bitfinex, have likely positioned themselves for a shift in Bitcoin trend. This is evident from the sudden decline in Open Interest and an increase in stablecoin reserves on the exchange. 

Also read: Grayscale’s Bitcoin sale unlikely to have driven BTC price lower, profit taking is likely driver

Daily Digest Market Movers: Bitcoin whales position for a shift in BTC price

  • Crypto market participants track the moves of large wallet addresses on derivatives exchanges like Bitfinex, since this helps determine the direction of BTC price, in the short term.  
  • According to CryptoQuant data, whales on Bitfinex have closed their leverages positions and Open Interest in BTC has declined by nearly 21%. 

Bitcoin

Bitcoin Open Interest and price. Source: CryptoQuant

  • The Open Interest in an asset is considered a key metric that represents the total value of open derivatives contracts, likely the investor confidence in BTC price decline is low.
  • Bitcoin price dropped nearly 2% in the past week and nearly 7% on a monthly time frame. 
  • While Bitcoin ETFs continue to attract billions of dollars in volume, the effect is yet to be seen on BTC spot prices. 
  • To find out more about the reasons Bitcoin price is on a decline, check this post. 
  • There is a correlation between Bitfinex Open Interest and Bitcoin price, and this is one of the key reasons why whale movements on the derivatives exchange are of importance to BTC traders. 
  • If the Tether exchange reserves continue rising, in tandem with declining OI, it is likely a bearish indicator for Bitcoin price. A correction in Bitcoin could follow as derivatives traders close their leveraged positions. 

Technical Analysis: Bitcoin price could bleed if it fails to bounce from $41,000

Mark Cullen, a crypto analyst on X (formerly Twitter) expects Bitcoin price to bounce from $41,000. If BTC fails to bounce from this level, Cullen predicts a correction in the asset. A bounce from the current level could send Bitcoin above $44,000 and a correction could push BTC to $39,080. 

BTC

Bitcoin price chart

Bitcoin, altcoins, stablecoins FAQs

What is Bitcoin?

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.

What are altcoins?

Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.

What are stablecoins?

Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.

What is Bitcoin Dominance?

Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.

Isenção de responsabilidade: Apenas para fins informativos. O desempenho passado não é indicativo de resultados futuros.
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