 Last week’s Bitcoin dip a ‘healthy realignment,’ lower risk of crash: Bitfinex 
2024-10-08

Bitcoins’ near 10% plummet last week was just a “healthy realignment” that should lower the risk of it suddenly dropping in the coming days and weeks, say analysts from crypto exchange Bitfinex. 
In an Oct. 6 report, Bitfinex analysts said the price of Bitcoin BTCUSD stumbling down to the $60,000 support zone along with several other key technical factors was a strong indicator of lowered volatility in the coming days and weeks. 
Bitcoin rallied to $66,600 on Sept. 27, but market optimism waned quickly as escalating geopolitical tensions in the Middle East and concerns around the strength of the United States economy snuffed out the appetite for risk. 
Bitcoin fell 9.94% from its peak to trough between Sept. 27 and Oct. 4, something that indicates “cautious sentiment” among spot investors at higher price levels. 
Bitfinex’s analysts speculated that buyers could still be looking to consolidate larger amounts of Bitcoin at lower prices. 
The resulting dip saw open interest in Bitcoin shrink from $35 billion to a more “stabilized” $31.8 billion, said Bitfinex. 
Additionally, the dip saw over $450 million long positions liquidated on Oct. 1, showing the market is largely biased toward capturing the upside. 
“This amount of liquidations being substantially large relative to the price decline is indicative of the long-biased leveraged positioning in the crypto market as we moved past the important technical and psychological level of $65,000,” the analysts wrote. 
The report said the market had been largely buoyed by positive US labor data in September and October, adding that broader optimism for risk should return with the Federal Reserve expected to cut interest rates again in November. 
Looking forward, the report said the recent move to the upside, which has seen Bitcoin rebound to $62,650, has seen the return of “spot buying aggression.” 
However, the analysts noted it’s still too soon to make any “definitive conclusions” about short-term market direction. 
“As the market remains reactionary, clues for future direction for BTC and the market, in general, may lie in any positioning seen in early-week trading sessions, particularly in the US,” read the report. 
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