- Bitcoin is printing a bearish pennant setup.
- BTC’s derivatives market’s open interest slumped significantly last week.
Bitcoin welcomed this week with selling momentum following its failure to sustain gains realized last week. A new analysis from CyptoQuant shows the leading cryptocurrency can dip further this week. Ghoddusifar, a pseudonym CryptoQuant analyst, stated that BTC is portraying a bearish trend.
This setup usually indicates continued declines. That means the pattern heightened the chances of Bitcoin stretching its plummets this week. If this narrative holds, we should anticipate a reaction from the market. BTC’s exchange flows match this view.
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The asset’s exchange outflows and inflows diminished over the past seven days, probably suggesting declined market confidence. The recent exchange flow data from Glassnode indicated that exchange inflows briefly surpassed outflows.
While BTC spot demand confirms lower confidence, the narrative is similar in the derivatives market. The asset’s derivatives open interest plummeted significantly within the previous week and maintained the tendencies over the weekend.
Such conditions bring uncertainty; market players are unlikely to place leveraged trades. Unsurprisingly, Bitcoin saw its predicted leverage ratio plunging slightly over the weekend, indicating reduced investor confidence about BTC’s near-term outlook.
Where are the Whales?
Now that the market sees deteriorated confidence, what about whales’ actions amid such conditions? That could help determine the possible outcome in the upcoming few days. BTC addresses with more than 1,000 BTC plunged significantly within the past five days.
That explains the prevailing selling pressure and why the crypto could not extend last week’s upside attempt. If the selling strength persists, investors can expect a BTC slide beneath $16K. Bitcoin has hovered around the $16K vicinity since the FTX-driven slump.
Last week’s second half displayed sideways action. The movement arose from changing demand from retailers, which cooled the incoming selling pressure. Nevertheless, the price dipped amid eroding market confidence. BTC investors should watch for more downsides and higher relative strength. That will lay the ground for a possible massive revival rally.
What are your opinions about BTC’s current trajectory? You can comment in the section below.