Every time Bitcoin’s [BTC] ranging performance reached $19,000, there was a healthy rise in demand. However, despite testing the same price again, demand has decreased this time. Let’s take a look at some of the contributing factors to this change and what it might mean for the future.
We observed a new high for Bitcoin’s estimated leverage ratio earlier in the week. This indicated that many traders anticipated the market’s recovery.In the present, there is significantly less demand than anticipated in the market.
Long-term leveraged liquidations succeed.
In comparison to demand levels at the beginning of the month, BTC demand in the derivatives market is still low. The decrease in the funding rate compared to its levels at the end of September demonstrates this. The open interest metric it used also pointed in the same direction.
The high leverage ratio, as anticipated, was bound to entice additional downside. Since October 11, the estimated leverage metric shows a slight decline. The liquidations that have taken place over the past two days are to blame for this outcome.
Well, Bitcoin’s metric of long liquidations saw a significant increase, particularly in the last 24 hours. This indicates that leveraged positions suffered significantly as the price continued to fall.
Does this imply then that the whales are trading? Whales holding between 1,000 and 10,000 coins accounted for the majority of the selling pressure at press time, according to BTC’s supply distribution metric on Santiment.
It makes sense that the market is so affected by the same category of whales. This is due to the fact that it currently controls the most BTC in circulation.
In other words, compared to the other categories of whales, they have the greatest impact on Bitcoin’s price action. Notably, the majority of the other BTC whales have not significantly impacted the current negative trend.
At the time of this writing, it should be noted that Bitcoin’s market cap has decreased by approximately $2.44 billion in the past 24 hours. At the time of writing, its price action had fallen below $19,000 to $18,701.
Despite the most recent outcome, BTC did not fall into oversold territory. However, it came close.
Conclusion
Given the abundance of highly leveraged longs earlier this week, the current price movement of Bitcoin is not surprising.
Additionally, this observation did not have a positive impact on demand, which increased the risk of a negative outcome. Due to unfavorable economic conditions, Bitcoin’s next move is still unknown.
