According to the latest Bitfinex Alpha report, Bitcoin (BTC)’s nearly 10% drawdown last week was a “healthy rebalancing” that reduces the risk of sharp price movements in the coming days.
The pullback caused by escalating tensions in the Middle East briefly pushed BTC below the $60,000 level before the market stabilized. This has reduced perpetual contract open interest (OI) from an overheated $35 billion to a more stable $31.8 billion zone.
In particular, the decline in OI has been correlated with increased selling in the spot market, causing a series of prolonged liquidations. Price initially lost the key support level at $65,200 and then plummeted as traders exited their positions.
According to the report, the decline and decline in OI suggests that the market is trying to find a balance. Although the movement has been reactionary, current market forces appear to be stabilizing as traders adjust their positions.
uncertain outlook
Bitcoin rebounded to the $62,500 price range on October 4, boosted by positive US labor market data. This recovery also supported the rally in some altcoins such as Dogwife Hut (WIF) and Solana (SOL).
Despite the upward momentum, the spot cumulative volume delta (CVD) indicator remains subdued, suggesting a lack of active buying activity in the spot market. Therefore, the outlook for Bitcoin and the broader cryptocurrency market remains uncertain and depends on several factors.
The report noted that upcoming Consumer Price Index (CPI) inflation data and ongoing geopolitical tensions will play a key role in shaping Bitcoin’s direction.
Additionally, a spot trader’s positioning at the beginning of the week is critical in determining the next move, as the early week sessions often provide insight into broad market sentiment.
Authors mentioned in this article
Gino Matos CryptoSlate Reporter
Gino Matos is a law school graduate and veteran journalist with six years of experience in the cryptocurrency industry. His expertise is primarily focused on the Brazilian blockchain ecosystem and decentralized finance (DeFi) development.
Editor Editor
CryptoSlate’s Assad Jafri Editor and Reporter
AJ has been a passionate journalist since the Arab Spring in Yemen in 2011 and has spent over a decade honing his skills around the world. Specializes in financial journalism and currently focuses on reporting on cryptocurrencies.
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