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Bitcoin is confronted with intense bearish futures pressure, but strong exchange purchase signals potential for a rebound. A short squeeze is possible, but panic sales can push the prices to $ 110k if sentiment deteriorates.
With Bitcoin[BTC] Trade within the lower limit of the consolidation range around $ 115k, market participants become Bearish.
As such, the capital inflow in the Futuresmarkt rises in the midst of an increased demand for short positions.
But is this a long -term care or a short -term exhaustion?
Bitcoin’s Bearish pressure rises
According to the analyst of cryptoquant Axel AdlerBitcoin’s Futures Net position has plummeted in a negative area.
After this dip, the net position of open interest rate has violated the $ 100 million, so that the highest levels of Beerarish pressure were achieved in three weeks.
Source: Cryptuquant
Usually, when this metric extreme bearish levels affects, this indicates that traders are strongly inadequate. Most market participants therefore expect prices to fall in the short term.
At the same time, Bitcoin’s Open Interest (OI) rose to a new highest point of $ 44.68 billion at the time of the press.
This huge wave reflects a higher capital influx in the Futuresmarkt.
Source: Cryptuquant
With net position change that reaches the highest negative level while OI is rising, this suggests that most of these traders fall short.
However, such an extreme negative OI divigence could catalyze a short squeeze cross if the price returns. Nevertheless, the risk of further decline as long as OI remains within the zone of Maximum Bearish.
Exchange activity offers mixed signals
Interesting is that, despite the rising OI divergence, exchanges absorb substantial purchase activity. On July 25, Exchange Netflow fell to a monthly low of -16.9k BTC, a clear accumulation signal.
Source: Cryptuquant
When Netflow and OI position in combination fall, this suggests that investors are careful and assets are moving for self-coasts. At the same time, large entities or smart money position for further deterioration due to futures.
Such market behavior indicates a mismatch in sentiment among market players.
A decline for BTC or a mere bear trap?
In particular, the increased situity in the futures while buying activity is increased with a short squeeze risk.
With many investors who have the market, if the purchasing pressure absorbs the sales pressure, BTC could return, which leads to short liquidations.
This is because the current price decrease remains within a historically normal reach. In June, for example, the maximum weekly price drop reached a low point of 3.8%.
Source: Cryptuquant
The recent withdrawal of 6% in Bitcoin remains within the typical volatility range – only 2.2% below average and far from extreme levels.
This suggests that the dip can be a healthy correction in the current consolidation phase.
If the market cools and stabilizes, it can return, which activates a short squeeze that can push BTC back to $ 117k.
However, if the sentiment of investors get worse and panic sales, the prices can continue to $ 110k.