Bitcoin's (BTC) price has witnessed a sharp correction at the start of each month in Q3 2024, with the first seven days of July and August seeing a drawdown of 12.56% and 15.94%, respectively. This downward price action led to another round of liquidations, with over $78 million over the past 24 hours.
Bitcoin open interest (OI) has dropped 12% from $34.7 billion to $30 billion over the past week, which is a net positive considering current market conditions. Rising OI when prices move sideways after a flash crash indicates that more short positions are being opened. Multiple days of negative funding rates after Aug. 5 confirmed the bearish bias.
However, it is important to note that Bitcoin also recovered swiftly to form lower highs (LH) in the following weeks. The drop in OI over the past week suggests that short-leverage traders could be nearing the exit until a clearer opportunity arises, potentially setting the stage for a 'relief rally' to $61,000.
Source: https://cointelegraph.com/news/bitcoin-relief-rally-61k-downside-liquidation
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