Bitcoin [BTC] fell further, dropping to a low of $65,548 amid a broader shift in the crypto market. At press time, Bitcoin [BTC] traded at $66,338, down 3.3% on the daily charts.
With heightened downside volatility, Bitcoin saw massive liquidations, especially for long positions. CoinGlass data showed $183 million in Bitcoin liquidations, with $170 million in longs liquidated.
Rising liquidations further intensified downward pressure, leading to additional losses.
Bitcoin whales turn to short positions
Although positions are getting aggressively liquidated, whale activity in the derivatives market has skyrocketed. Some whales have closed their positions, while others have taken new ones.
These positions have mostly been short positions. According to Lookonchain, a whale opened another 2x short position on 410 BTC worth $27 million.
Previously, the trader had profited from his last 2 BTC short positions, totaling $8.65 million. Onchain Lens also reported that the whale “pension-usdt.eth” closed its BTC short position, making $1.7 million in profit.
Interestingly, these positions aren’t isolated. The Long/Short Ratio has stayed below 1 for the past 48 hours and was at 0.93 as of writing.
When the ratio falls to such low levels, it suggests that most futures participants were bearish and anticipated the price to continue to slip.
Selling pressure still dominates both markets
As Bitcoin stayed below key levels, investors in both spot and futures markets exited to secure gains or limit losses.
On the Spot side, whales ramped up spending. Lookonchain reported that NYDIG moved 4,500 BTC worth $295.5 million to Wintermute, Cumberland, FalconX, B2C2 Group, and Galaxy Digital.
When whales close positions during an extended period of weakness, it indicates a lack of market confidence.
On the Futures side, traders have aggressively closed their positions, most likely to reduce exposure and avoid liquidations. According to CoinGlass data, over $16.89 billion flowed out of the Futures market compared to $15 billion in inflows.
As a result, netflow declined by 243% to -$1.83 billion, at the time of writing, a clear sign of aggressive futures selling activity. Often, a higher selling pressure across the market has preceded lower prices, as downside pressure mounts.
In fact, the downward momentum strengthened further. Looking at the Stochastic Momentum Index (SMI), the momentum indicator fell further into negative territory.
At the same time, the Momentum indicator (MOM) extended its stay within negative territory, further confirming the prevailing trend.
Typically, when these momentum indicators are set in this manner, they signal the likelihood of the trend’s continuation. Thus, if sellers continue to dominate, BTC could breach the $65k support and drop towards $63,400.
However, if the external market forces currently draining the market cool down, BTC will rebound from this slip, reclaim $68k, and eye $70k again.
Final Summary
- Bitcoin whales flipped bearish and turned to aggressive short positioning amid a broader market pullback.
- BTC extended its bearish streak, dropping to a 3-week low of $65,548 before slightly rebounding to $66,338 at press time.
