Market Overview: Bitcoin’s Recent Dip Below $92,000
In the latest overnight trading session, Bitcoin (BTC) experienced a significant dip, falling below $92,000 and revisiting levels that have shown strong resistance since December. This decline is accompanied by a striking increase in open interest for perpetual futures on Binance, suggesting a growing dominance of sellers in the market.
Surge in Open Futures Bets Indicates Bearish Sentiment
Recent data from Coinglass reveals that the open interest in the BTC/USDT pair on Binance surged by approximately 12,000 BTC, which translates to over $1 billion. This uptick occurred as Bitcoin’s price plummeted from $96,000 to under $92,000. The rise in open interest alongside a falling price typically signals a surge in bearish short positions, indicating that traders are likely opening new short bets in anticipation of further declines.
Understanding the Cumulative Volume Delta (CVD)
The cumulative volume delta (CVD) across both futures and spot markets on Binance has turned negative, further reinforcing the narrative of increased selling pressure. The CVD serves as a critical indicator of net capital flows into the market: rising positive figures suggest buyer dominance, while negative readings highlight intensified selling activity. The current negative trend indicates that selling has outpaced buying, reinforcing the bearish outlook.
Technical Analysis: Bearish Marubozu Candlestick Pattern
On Monday, Bitcoin saw a notable decline of 4.86%, with sellers firmly in control throughout the trading day. This bearish sentiment is visually represented in Monday’s candlestick, characterized by minimal upper and lower shadows and a substantial red body. Such a candlestick formation indicates that the opening and closing prices were nearly identical, reflecting a lack of influence from buyers during this period.
Implications of the Bearish Pattern
Technical analysts classify this formation as a bearish marubozu pattern. The emergence of this bearish candlestick pattern, combined with Bitcoin trading below significant 50- and 100-day simple moving averages (SMAs), could empower sellers and potentially lead to further price declines. Current support levels are identified at approximately $89,200, which corresponds to the low recorded on January 13, with additional support near the 200-day SMA at around $81,661.
Key Levels to Watch
On the resistance side, traders should keep an eye on the February 21 high, which stands at roughly $99,520. This level will be crucial for any potential rebounds as sellers remain active in the market.
