- Bitcoin’s shift to hedge mode, with increased short positions, indicates anticipation of a significant price decline.
- Aggregate Perpetual CVD data confirms bearish sentiment, with longs closing faster than shorts open.
- Despite current stability, technical indicators suggest potential downward momentum, prompting caution among investors.
Bitcoin’s volatility has investors on edge as the cryptocurrency sees a notable downturn, with prices hovering around $65,000. As highlighted by Skew, an analytic firm, market data indicates a shift towards hedge mode, characterized by an increase in short positions.
This movement is particularly pronounced on Binance perps, where aggressive hedging into the daily close is observed. Bybit perps, on the other hand, show a trend of longs capitulating and new shorts entering the market. This suggests a prevailing sentiment of anticipation for a significant price decline.
Aggregate Perpetual Cumulative Volume Delta (CVD) data further confirms the market’s bearish outlook, with longs closing positions at a faster rate than shorts opening them, driving the CVD lower than the current price. Additionally, the normalized CVD metric is declining, reflecting the selling pressure from longs and the rise in short positions. Quarterly Annualized Basis rates are experiencing a decline amidst the current market downturn, which is perceived as a healthy adjustment.
Despite the bearish sentiment, Bitcoin’s current price reflects resilience, standing at $64,921.07, with a 24-hour trading volume of $57 billion. However, a 5.20% decrease in the last 24 hours signals a challenging period for investors.
Technical indicators further support the notion of a bearish trend in the short term, with the 1-Day RSI at 50.99, indicating neutrality. However, the MACD is trading below the signal line, and the KST is also below the signal line, suggesting potential downward momentum.
As further noted by Skew, the market’s slow grind lower is evident, with sell flow primarily originating from twap selling on Binance and Coinbase spot exchanges. Despite the current stability around the $65,000 mark, there is a growing acceptance that further downside volatility may occur.
Investors are wary of potential sell-offs, necessitating caution in navigating the market’s uncertain terrain. While short-term bearish signals persist, the overall sentiment remains cautiously optimistic, with market participants closely monitoring sell-side pressure and key price levels.
