Glassnode has explained in a blog post that the current level of this crypto is historically and psychologically significant. As noted after the May 2020 crash, the market has seen an uptrend every time the share of the “profit-looking” bitcoin supply falls by 70% or below.
The blog notes that a reaction at this level will provide deeper insight into the medium-term direction of the bitcoin market. If the coin falls further than this, then loss-making sellers may be forced to sell their share, while the heavy investment can provide a much needed psychological relief, with more coins coming back in profit.
However, as things stabilize, both bullish and bearish indicators come in, which makes it difficult to tell which side the crypto market might swing in the coming weeks. But open interest in the bitcoin derivatives market suggests that a certain group of investors is ready to take a loss. Open interest in this case means that BTC holders have placed bets on bitcoin to hit a fixed price at any point in the future, which may be lower or higher.
According to on-chain data provided by a market intelligence firm, the open interest in BTC futures is around 250,000 bitcoins (around Rs 77,911 crore) and the figure is “historically high”.<!–
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