Bitcoin's recent dip below $60,000 has led to a significant reduction in perpetual open interest, stabilizing the market. Last week's pullback resulted in a $3 billion decrease in open interest, shifting from $35 billion to $31.8 billion. This adjustment is seen as a healthy realignment, mitigating the risks of sudden price fluctuations.
The pullback was primarily triggered by escalating tensions in the Middle East, which caused Bitcoin to briefly dip below the $60,000 mark. Notably, this was accompanied by a drop in open interest, indicating increased selling activity in the spot market and triggering long liquidations. The price fell past a crucial support level at $65,200 as traders exited positions.
Market Stabilization
Despite these fluctuations, Bitcoin rebounded to around $62,500 on October 4, buoyed by positive U.S. labor market data. This recovery also benefited select altcoins, including Dogwifhat and Solana. However, the Spot Cumulative Volume Delta (CVD) remains low, suggesting a lack of aggressive buying in the spot market, leaving the outlook for Bitcoin and the broader crypto market uncertain.
Upcoming Consumer Price Index (CPI) inflation data and ongoing geopolitical tensions are anticipated to significantly influence Bitcoin's future direction. Additionally, the positioning of spot traders at the start of the week will be critical in shaping market sentiment and potential price movements.
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