Bitcoin price dropped below the important support level at $70,000 on Wednesday as activity in the futures market faded. BTC token was trading at $68,600, down sharply from the all-time high of $126,300.
Bitcoin Price Slips as Futures Open Interest Falls
BTC price continued its strong downward trend this week as investors in the spot and futures markets remained in the sidelines.
Data shows the volume of Bitcoin traded in the last 24 hours dropped to $40 billion. While this is a big number, it was lower than the historical average.
More data shows that the futures open interest has continued falling in the past few months. It stood at over $44 billion, down from the all-time high of over $95 billion.
The falling futures open interest is a sign that investors are reducing the amount of leverage they are using to buy Bitcoin. A lower open interest is usually a sign of weak demand.
Indeed, data shows that demand for spot Bitcoin ETFs has continued to dwindle in the past few months. These funds have had over $173 million in outflows this month after they lost over $1.6 billion in the previous month. The total inflows now stands at $54 billion, down from a record high of over $65 billion.
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One potential reason why Bitcoin demand has faded is that American investors have rotated to other assets that are doing well. For example, the stock market is booming, with the Dow Jones and S&P 500 indices trading at their all-time highs. Stock market ETFs have added billions of dollars, with Vanguard’s VOO adding over $70 billion so far this year.
Another reason is that a deal on the CLARITY Act has remained elusive in the past few weeks, and a meeting between banks, crypto executives, and the White House did not solve it.
BTC Price Prediction: Technical Analysis
Bitcoin price chart | Source: TradingView
The weekly chart shows that the value of Bitcoin has continued to drop in the past few weeks. It retreated from a record high of $126,300 in October to the current $68,650.
The spread between the 50-week and 100-week Exponential Moving Averages (EMA) has continued to narrow in the past few weeks., meaning that a mini death cross is possible.
Bitcoin has also moved below the Supertrend and the Parabolic SAR indicators. At the same time, the Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have continued falling in the past few months.
Therefore, the most likely Bitcoin price prediction is bearish, with the next key target being this month-to-date low of $60,000. A drop below that level will point to more downside.
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