Traders have been tired of buying the dip over the past couple of months, yet most of the cryptocurrencies are not in a mood to find their grounds. The severe crypto crash on Thursday wiped out over $40 billion in market cap in just 48 hours. Veterans across the space are pondering over the weakening support levels.
The king coin Bitcoin was a major victim in the recent crypto crash. It has lost more than $8,000 in just 48 hours and currently, it is trading at a multi-month low of $35,832. As sell-offs are out of control, the flagship would even fall below $30k in the next couple of weeks.
Bitcoin Open Interest Flash Crash Intact! BTC Correcting To $30k Is Inevitable!
Bitcoin crashed at historical rates losing its crucial grounds. Specifically, $2.83 billion open interest depleted in the perpetual market. With a total of $372 million long liquidations in the perpetual markets, the funding rate turned negative in the last 24 hours.
Although there was a substantial open interest flush out, the estimated leverage ratio is still relatively high by 0.21. Hence, there is a chance of complete open interest flushing out in the next couple of weeks. Usually, Bitcoin price follows open interest flow. Cryptoquant, a crypto metric platform indicated that open interest was a straightforward indicator to understand the market sentiments.
Also Read : This is Why Retail Traders Are Cashing Out, While A Country is Buying the Dip
During the May bear cycle, OI depleted from its ATH of $15 billion to a multi-month low of $4.5 billion owing to the Chinese blanket ban on Cryptos. And it has eventually recovered and reached a new ATH above $16 billion in the October bull cycle. However, as the estimated leverage ratio is still high, we can expect another $4 to $5 billion OI flush out.
Collectively, the historical footprints suggest that as funding rate and Open Interest (OI) depletes, BTC price will be impacted eventually. Meanwhile, a total of 52,645options expiry set on January 28th, is likely to catalyze the downward move. However, as there are no strong signs of bullish divergence anytime soon, bears are likely to haunt the price below $30k in the next couple of weeks.
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