- Social data showed traders saw the earlier collapse as an opportunity.
- Open Interest increased after an initial decline as BTC rose above $66,000.
Moments after Bitcoin [BTC] surpassed the $69,000 All-Time High (ATH), after which the price crashed. At one point, the value of BTC on the Binance exchange fell below $60,000 as market volatility increased. Despite the nosedive, many market participants saw it as an opportunity to score the coin at a discount.
AMBCrypto confirmed this after assessing the market on March 5. According to our analysis Using Santiment’s social tool, calls to buy the dip reached one of the highest in recent months.
Source: Santiment
Confidence returns
When market participants cast their votes in this way, it means they are confident that prices will recover. Data also showed that traders saw the rapid decline as a normal liquidity flow.
Interestingly, BTC did not disappoint. Although the coin has failed to retest the ATH, it could rise to $66,267 at the time of writing.
Bitcoin’s new ATH came as a surprise to many market players. Previously, the coin usually reached a new high after the halving, which was accompanied by supply cuts and rewards for miners.
However, this time was different, and AMBCrypto did well to explain the underlying factors that influenced this new paradigm.
In addition, yesterday’s price fluctuations caused some changes in the derivatives market. Thus came the Open Interest (OI), which initially made a leap crash down.
The OI is the total value of unsettled contracts on the market. In the run-up to the ATH, traders had opened long positions with a price target of $70,000.
But Bitcoin’s inability to tap into the region caused liquidations worth more than $1 billion. Also, the decline in OI suggests that those who escaped the terrible extermination had to close their positions.
However, Coinglass press time data showed that sentiment has changed. At the time of writing, Bitcoin Open Interest has risen to $31.35 billion.
Source: Coinglass
BTC’s full recovery depends on critical resistance
The recovery implied that traders were confident that volatility had subsided. Therefore, it could be a little easier to potentially profit from BTC.
Price-wise, a rising OI, alongside Bitcoin’s uptrend, could drive a higher value. In a very bullish case, BTC could hit its ATH or possibly go past it.
From a technical perspective, the Relative Strength Index (RSI) over the 4-hour time frame showed that the coin was almost oversold.
However, the renewed buying pressure has brought the RSI back above the midpoint. If momentum remains bullish, BTC could move higher.
Source: TradingView
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If this is the case, the price could add another 7.34%, leading to $72,000. However, Bitcoin could face a stumble around $68,220.
A close above that resistance could confirm the bullish thesis. But failure to break through could force the price back towards the support at $63,252.