In the past two days, Bitcoin dropped from $65,062 to $58,053, a decrease of 10.8%, as enthusiasm over potential Federal Reserve interest-rate cuts faded. Over the past three months, Bitcoin has fallen by 12% and is currently trading 20% below its peak of nearly $74,000 reached in March.
Maartunn, a leading author at CryptoQuant, has examined this recent market movement and highlighted five key charts that explain the dramatic changes in cryptocurrency prices.
5 Key Charts on the Recent Price Drop
Maartunn, a prominent author at CryptoQuant, has analyzed the recent market movement and identified five key charts that help explain the dramatic shifts in cryptocurrency prices.
Short-Term Holders Create Resistance
One significant factor in the recent drop is the resistance created by short-term holders. These holders, who bought Bitcoin at higher prices, are now experiencing losses. Earlier this month, Bitcoin’s sharp decline left these short-term holders with an average 17% loss.
As the price recovered to their average cost, they sold around break-even, creating resistance that contributed to the ongoing price struggles.
Rising Open Interest
The rise in Open Interest up 31% from $13.5 billion to $17.9 billion since August 5th indicates increased speculation in the Bitcoin futures market. However, positive Funding Rates suggest a premium on perpetual contracts, further adding to market instability.
Bitcoin ETFs Inflow In Green
Amid the price decline, the U.S. spot Bitcoin (BTC) exchange-traded funds (ETFs) are experiencing strong performance, with eight consecutive days of net inflows totaling $195.65 million.
Meanwhile, another led CryptoQuant’s author IT Tech noted that these inflows primarily came from large holders, adding additional strain to already unstable futures positions.
Surge in Long Liquidations
The recent price drop has led to a significant increase in liquidations. Ethereum long liquidations surged to $55 million, and Bitcoin long liquidations reached $90 million, marking the highest levels since early August.
This surge in liquidations has caused Open Interest to drop by $2.2 billion, as many traders were forced to exit their positions.
Market Stabilization Needed
The recent market turmoil has left many traders in precarious positions. As a result, the market will need some time to stabilize. Monitoring on-chain data in the coming days will be crucial for understanding future price movements and market conditions.
