$450 million in futures were liquidated on the market but in the same period, Bitcoin pulled back by 7% and showed some weakness in momentum as we can see in our latest Bitcoin news below.
On Binance, the price of BTC Dropped to as low as $29,500 and it is now retesting a critical support level. The open interest of the futures market was high lately and the market was seeing some $200 million to $450 million in future liquidations. The open-interest refers to the total sum of active futures contracts that are open so when this interest is high, it shows that more traders are betting on prices of crypto. Since there’s a huge number of positions open on the market, when there’s a minor market movement it launches a liquidations movement. BTC is seeing some extreme price volatility in both directions which leads to fast recoveries and even stronger corrections. Analysts at Future Fund noted:
“Miners send in $btc to exchanges to sell, bitcoin drops. Exchanges liquidate over leveraged gamblers. People sell alts thinking the market is doomed, and repeat. This has been repeating for years. The alts with smart money and strong hands survive. Don’t sell, accumulate.”
The sentiment on BTC remains cautious in the short-term as two indicators suggested a relief in the near future as well. The premium on Coinbase reappeared which indicates that the buyers in the US will be accumulating the recent BTC dip. Once BTC declined, the premium on Coinbase appeared and BTC saw swift rallies. For example, when BTC dropped to $16000 the buyers bid the $16K support area. Next, the premium in the South Korean crypto exchange market dropped from 5% to 1%.
Over the past two weeks, the Asian whales were taking advantage of the premium on South Korean exchanges which led to many $100 million deposits across major crypto exchanges including BitHumb. The premium subsided and there’s a chance of selling pressure declining at least on the South Korean market. The combination of the low selling pressure and the rising premium on coinbase is what’s contributing to the short-term BTC uptrend.
DeFi Tokens were previously hit hard with a correction of BTC. ETH was recovering as well alongside BTC as it increased above $1270 and remains at the short-term key level of $1370 that poses as a resistance.
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