Bitcoin [BTC] Breaks Out of Consolidation and Rallies to Reclaim the $100k Level

Over the past day, Bitcoin [BTC] broke out from consolidation and rallied to reclaim the $100k level. However, shortly after, the market slightly pulled back, causing BTC to settle down at $109,062.

Bitcoin (BTC) price broke above the crucial $107k resistance on Wednesday and even touched the $110k level. However, the crypto encountered some resistance around $110k, leading to a slight pullback.

As a result, BTC settled down at $109k, sparking the interest of CryptoQuant analyst Axel Adler, who predicted further decline, citing Bitcoin’s Open Interest.

Bitcoin Open Interest saw a huge decline of $1 billion

According to Adler, Bitcoin’s Open Interest saw a huge decline of $1 billion in the past day. Such a significant decline indicates a large-scale position unwind and reduced leverage as investors strategically exited the market.

The drop in OI created a negative net taker volume, which reflects sellers’ dominance in the market, thus causing a pullback from $110k.

This seller dominance is also evident in Bitcoin’s Taker Buy Sell Ratio, which dipped to negative levels for the first time in four days.

Taker Buy Sell Ratio measures the relative strength of buyers and sellers who are entering the market with market orders (also known as “taker” orders). A negative Taker Buy Sell Ratio indicates that sellers have entered the market and are dominating.

As such, Bitcoin’s spot CVD also remained positive, reflecting a high profit realization in the spot market.

Therefore, as Bitcoin rallied to $100k, investors in the spot market turned to profit realization while those in the Futures market decided to reduce leverage.

Thus, traders on the spot exchanges are mostly selling, creating downward pressure on prices. The same pattern was reflected in the exchange activity, which turned positive after a fall in recent days.

At press time, Bitcoin’s exchange netflow was 1.2k BTC, reflecting higher exchange inflows. This implies that most holders and investors are sending their coins into exchanges.

These conditions point towards caution in the market, as some investors feared another pullback.

Some market participants took the recent price uptick as an opportunity to realize profits, while those in Futures are aggressively reduced their leverage.

After sellers entered the market, it created a downward pressure, resulting in a further decline on price charts. A further retrace will see Bitcoin retest the $107k support level, which has acted as a resistance previously.

A failure to hold above here will send BTC back to $106k, as predicted by Adler.

However, if bulls continue to eye a higher resistance, they could start buying again and will absorb the pressure arising from the Futures market. If they hold, the market will reclaim $110k and eye $112k once again.