It‘s looking more and more like a capitulation, but so far, open interest remains “unflushed,” analysts warn.
Bitcoin (BTC) refused to stem recent losses during Jan. 22 as predictions of a flight to $33,000 and lower looked increasingly likely to become a reality.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView.
Open interest “still not flushed”
Data from Cointelegraph Markets Pro and TradingView followed Bitcoin (BTC)/USD as it fell through $35,000 during the first half of Jan. 22.
With few silver linings available for the bulls, lower weekend volume was poised to deliver some classic erratic moves after Bitcoin lost $40,000 support on Jan. 21.
While some, including El Salvador, made the most of new lower levels, others voiced concern that despite the drop, pressure still remained on bulls.
“Crazy part is open interest still hasn’t flushed,” trader and analyst William Clemente summarized, one of many market participants noting that derivatives traders are still attempting to fight the trend.
“After all this carnage and absolute state of panic funding somehow isn‘t giga negative, futs aren‘t backwarded and OI barely went down. Interesting times. And with ‘interesting’ I mean poverty,” popular Twitter account Byzantine General additionally quipped.
Bitcoin futures funding rates chart (Binance). Source: Coinglass.
RSI sinks towards March 2020 COVID lows
A source of slight relief came in the form of Bitcoin‘s relative strength index (RSI) on the day, this dipping to its lowest levels since March 2020.
Related: Here’s 3 ways the relative strength index (RSI) can be used as a sell signal
At that time, BTC/USD crashed to $3,600 before staging a comeback that would last well into the following year.
Daily RSI stood at just 20 on Jan. 22, already well below even the classic “oversold” zone.
BTC/USD 1-day candle chart (Bitstamp) with RSI. Source: TradingView.
“A bit more reliable than Bitcoin alone -> total market capitalization is at next level of support, while the daily RSI hits the lowest level since March 2020,” Cointelegraph contributor Michaël van de Poppe commented on the situation.
“Equities sentiment is also on the lowest level since March 2020. Says it all.”
Equities markets had taken a hit towards the end of the week, with tech stocks particularly in the line of fire and crypto once again showing the extent of its positive correlation.