Bitcoin ‘late longs’ washed out when BTC price dropped to $65,000
Bitcoin bears have extended their sell-off since the July 30 Wall Street open as a fall below $66,000 has led to a reduction in leveraged longs.
Data from Cointelegraph Markets Pro and TradingView showed the price of Bitcoin (BTC) trading at $65,798, down 2.3% in the last 24 hours.
This suggests that this area is important for bears following a series of failed attempts to rise above $70,000.
Commenting on Bitcoin's recent price action, popular trader Skew says that roughly $800 million in BTC futures open interest (OI) has been lost following the recent decline from $70,000.
“The latter's long-term losing streak appears to have ended here. Cleared around 12K BTC or $802M in OI.
Open interest refers to the total number of BTC-linked contracts currently open on all exchanges.
According to Skew, spot selling is responsible for the sell-off, and the market will need more leveraged long positions and increased spot buying volume to recover the weekly open at $67,500.
BTC liquidity will be held at $69,000, creating a “huge sweep on open interest,” said Dan CryptoTrades of his partner.
Like Skew, Daan Crypto Trades also believed that spot movement helps determine the direction the market will take.
In an earlier X post, Diane CryptoTrades noted that “large orders” are placed above the spot price, “they are all in place and mostly trying to hold the price at the moment.”
Bitcoin futures open interest is increasing rapidly and reached a new all-time high of $39.46 billion on July 29 across all exchanges, according to Coinglass data.
Given this rapid growth of OI, Diane Cryptotrades said, “I think we have reason for a lot more volatility.”
As such, market participants shifted their focus to long traders and spot buying activity.
Related: Bitcoin Analysis Warns BTC Price Liquidations Will Start Below $64K
According to data from Coinglass, a long BTC liquidation will begin if the price returns to $65,500, a 0.25% drop from current levels.
The chart below shows that short liquidity is increasing between $70,000 and $72,000. However, some longs could flow between $60,372 and $58,400 using 10x leverage, suggesting that the decline could reach these levels.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
