Market conditions show that the coin is ripe for another decrease amid waning interest.
- Money flowed out of BTC contracts, suggesting that the price might fall to $65,000. Social dominance dropped to 7.07%, indicating that attention was moving to other cryptocurrencies.
The total Bitcoin [BTC] Open Interest has lost almost $1 billion in value between the 23rd and 24th of May. AMBCrypto found out after examining the metric using Santiment’s on-chain data.
On the 23rd, Bitcoin’s Open Interest (OI) was $11.75 billion. But at press time, the figure had decreased to $10.77 billion. OI is the value of outstanding positions in a contract.
In crypto trading, there are two sides to a trade— a buyer and a seller. When OI increases, it means that there is new money coming into the market in favor of the buyers.
Decreasing attention may nuke BTC again
A trend like this suggests a bullish trend. But if the metric indicates gets too high, the OI could serve as a bearish sign. On the other hand, a decline in Open Interest suggests an increase in positions closed which favors sellers.
Therefore, the trend above indicates that most traders are not initiating new positions. For Bitcoin’s price, this was a bearish sign, and it had started to reflect on the price.
Source: Santiment
At press time, BTC changed hands at $67,123. This was a 3.52% decrease in the last 24 hours. Apart from the decline in OI, Bitcoin’s decline could be linked to recently approved Ethereum spot ETFs.
From AMBCrypto’s investigation, it seemed that traders were rotating capital into ETH and other altcoins. Should this remain the case for some time, BTC could drop further, and a move to $65,000 could be possible in the short term.
Recently, we reported that Bitcoin’s price could drop before a return to $70,000. As such, it indicates that the prediction could be playing out already.
Watch out! A bounce may be coming
Another metric assessed was social dominance. As of this writing, Bitcoin’s social dominance dropped to 7.07%. Some days ago, the metric was over 28%.
The decline in this metric implies that discussions related to the cryptocurrency had fallen, suggesting that attention from the market was moving elsewhere.
Should social dominance continue to drop, the prediction of $65,000 could come to pass. However, a further decline could indicate a bottom for BTC.
Furthermore, Bitcoin’s Funding Rate was 0.01%. Funding Rate is the cost of holding an open contract in the market. If the funding rate is positive, it means that the contract price is trading at a premium compared to the spot value.
Source: Santiment
When the positive rate is negative, it means the contract price is at a discount to the index price. With the funding moving lower and the price decreasing, Bitcoin could remain bearish in the short term.
However, it might not take a long while before the price rebounds.
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