Bitcoin (BTC) experienced a significant pullback of nearly 10% last week, described as a “healthy adjustment” that potentially mitigated the risk of sudden price fluctuations, according to the latest report from “Bitfinex Alpha.”
This decline, prompted by escalating geopolitical tensions, briefly pushed Bitcoin’s value below the $60,000 mark before the market found stabilization. This corrective movement led to a decrease in open interest (OI) in perpetual contracts, which fell from an overheated $35 billion to a more balanced $31.8 billion.
Interestingly, the reduction in OI was linked to heightened selling in the spot market, leading to a wave of long position liquidations. The crucial support level at $65,200 was also breached, resulting in a noticeable price decrease as traders adjusted their positions.
Market Sentiment and Future Outlook
On October 4, Bitcoin made a rebound to around $62,500, bolstered by favorable U.S. labor market reports. This resurgence also positively impacted several altcoins, including Dogwifhat (WIF) and Solana (SOL).
However, despite the recent upward trend, the Spot Cumulative Volume Delta (CVD) remained low, indicating a lack of vigorous buying enthusiasm in the spot market. Consequently, the outlook for Bitcoin and the broader cryptocurrency market remains vague and contingent on several external factors.
The upcoming Consumer Price Index (CPI) data and ongoing geopolitical uncertainties are expected to play pivotal roles in influencing Bitcoin’s trajectory.
Moreover, the positioning of spot traders at the week’s outset will be critical in forecasting the market’s next steps, as early-week trading often reveals broader market sentiment.
Key Influencers on Bitcoin’s Direction
- Geopolitical tensions impacting market stability.
- Consumer Price Index (CPI) inflation data influencing investor confidence.
- Spot traders’ initial positioning providing insight into market sentiment.
- Current trends in altcoins and their correlation with Bitcoin performance.
Contributors
Assad Jafri
Editor & Reporter at CryptoSlate
A journalist with over a decade of experience, AJ focuses on delivering insightful financial journalism, particularly in the crypto domain.
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