- Money flowed out of BTC contracts, suggesting the price could fall to $65,000.
- Social dominance dropped to 7.07%, indicating that attention shifted to other cryptocurrencies.
The total Bitcoin [BTC] Open Interest lost nearly $1 billion in value between May 23 and 24. AMBCrypto found out after examining the statistics using Santiment’s on-chain data.
On the 23rd, Bitcoin’s Open Interest (OI) was $11.75 billion. But at the time of writing, this figure had fallen to $10.77 billion. OI is the value of outstanding positions in a contract.
In crypto trading, there are two sides to a transaction: a buyer and a seller. When OI increases, it means new money enters the market in favor of buyers.
Reduced attention could destroy BTC again
A trend like this indicates a bullish trend. But if the benchmark gets too high, the OI could serve as a bearish sign. On the other hand, a decrease in Open Interest indicates an increase in the number of closed positions, which is to the advantage of sellers.
Therefore, the trend above indicates that most traders are not taking new positions. For the price of Bitcoin, this was a bearish sign, and it started to reflect on the price.
Source: Santiment
At the time of writing, BTC changed hands at $67,123. This was a drop of 3.52% in the past 24 hours. Aside from the drop in OI, Bitcoin’s decline could be linked to recently approved Ethereum spot ETFs.
AMBCrypto’s research showed that traders were switching their capital into ETH and other altcoins. Should this remain the case for some time, BTC could fall further and a move towards $65,000 could be possible in the near term.
We recently reported that Bitcoin’s price could drop before returning to $70,000. As such, this indicates that the prediction could already come true.
Watch out! There may be a bounce
Another measure assessed was social dominance. At the time of writing, Bitcoin’s social dominance has dropped to 7.07%. A few days ago the statistic was over 28%.
The drop in this measure implies that discussions about the cryptocurrency had waned, indicating that the market’s attention was shifting elsewhere.
Should social dominance continue to decline, the $65,000 prediction could come true. However, a further decline could indicate a bottom for BTC.
Furthermore, Bitcoin’s funding rate was 0.01%. It’s the financing rate costs for maintaining an open contract on the market. If the financing rate is positive, it means that the contract price is at a premium to the cash value.
Source: Santiment
Read Bitcoin’s [BTC] Price forecast 2024-2025
When the positive interest rate is negative, it means that the contract price is at a discount to the index price. With funding tightening and price falling, Bitcoin could remain bearish in the short term.
However, it won’t be long before the price recovers.