Declining price volatility signals oversold condition for BTC
Bitcoin (BTC) finds itself in a bearish state following a series of significant sell-offs that have caused a market-wide downturn.
At the time of writing, BTC has experienced a 0.6% increase in the past 24 hours and is currently trading at $58,180. The cryptocurrency’s market capitalization stands at $1.14 trillion. Data reveals that BTC’s daily trading volume has surged by 42%, reaching $29.5 billion.
Data provided by Santiment shows that Bitcoin’s total open interest has fallen from $10.29 billion to $10 billion in the last day. This decline coincides with a total of $148 million in BTC liquidations.
Coinglass data indicates that within the past 24 hours, $100 million worth of short BTC trading positions and $48 million of long positions have been liquidated. The largest liquidation, valued at $22.24 million in BTC-USDT-swap, occurred on the OKX crypto exchange.
As the open interest diminishes, it is expected that Bitcoin will experience reduced price volatility due to the decrease in liquidations.
Santiment data reveals that the BTC Relative Strength Index (RSI) currently sits at 30, indicating that the flagship cryptocurrency is oversold at its current price point. Combined with the declining open interest, this could suggest a potential short-term price surge for Bitcoin.
In addition to the bearish market conditions, Bitcoin’s whale activity has also declined significantly after falling below the $54,000 mark on July 5. Santiment reports that the number of whale transactions involving at least $100,000 worth of BTC has dropped from 11,648 on July 5 to 6,063 unique transactions at the time of writing.
It is important to note that the bearish momentum in the overall market has largely been influenced by the recent BTC sell-offs over the past three weeks. Notably, the U.S. government, the German government, and the now-defunct crypto exchange Mt. Gox have collectively moved over $1 billion worth of Bitcoin since June 19.
Read more: As Bitcoin experiences a 4% drop, altcoins BRETT, PEPE, WIF, and JUP plummet by 10%.
