Bitcoin [BTC] fell further, dropping to a low of $65,548 amid a broader shift in the crypto market. At the time of writing, Bitcoin [BTC] traded at $66,338, down 3.3% on the daily charts.
Due to increased downside volatility, Bitcoin saw massive liquidations, especially for long positions. CoinGlass data showed $183 million in Bitcoin liquidations, with $170 million of longs liquidated.
The increasing liquidations further intensified the downward pressure, leading to additional losses.
Bitcoin whales turn to short positions
While positions are being liquidated aggressively, whale activity in the derivatives market has skyrocketed. Some whales have closed their positions, while others have taken new ones.
These positions were often short positions. According to Look at chaina whale opened another 2x short position on 410 BTC worth $27 million.
Previously, the trader had profited from his last two BTC short positions, totaling $8.65 million. Onchain lens also reported that the whale “pension-usdt.eth” closed its short position in BTC and made $1.7 million profit.
Interestingly, these positions are not isolated. The Long/Short ratio has remained below 1 for the past 48 hours and stood at 0.93 at the time of writing.
When the ratio falls to such low levels, it indicates that most futures participants were bearish and expected the price to continue falling.
Selling pressure still dominates both markets
As Bitcoin remained below key levels, investors in both the spot and futures markets exited to secure gains or limit losses.
On the Spot side, the 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 their positions during an extended period of weakness, it indicates a lack of market confidence.
On the futures side, traders have been aggressively closing their positions, most likely to reduce exposure and avoid liquidations. More than $16.89 billion flowed out of the futures market, compared to $15 billion in inflows, according to data from CoinGlass.
As a result, net flows fell 243% to -$1.83 billion, at the time of writing, a clear sign of aggressive futures selling activity. Often, higher selling pressure on the market has preceded lower prices, while downward pressure is increasing.
The downward momentum was even further strengthened. 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 in negative territory, further confirming the prevailing trend.
When identified in this way, these momentum indicators typically indicate that the trend is likely to continue. So, if sellers continue to dominate, BTC could break the USD 65,000 support and drop to USD 63,400.
However, if the external market forces currently draining the market cool down, BTC will recover from this skid, recover $68,000 and be back on target at $70,000.
Final summary
- Bitcoin whales turned bearish and turned to aggressive short positioning amid a broader market pullback.
- BTC extended its bearish streak, falling to a three-week low of $65,548 before recovering slightly to $66,338 at the time of writing.