• Bitcoin has been struggling to hold above $17,000, despite this being an important price level for the cryptocurrency
  • Where it trends next will depend largely on whether or not bulls can continue building support at this level
  • So far, each dip below it has been met with intense buy-side support that has allowed it to ascend
  • Where it trends next will likely depend largely on its imminent price action
  • It is important to note that this recent selloff resulted in nearly $1 billion in open interest being wiped out
  • This may make the cryptocurrency fundamentally healthier in the days, weeks, and months ahead

Bitcoin and the rest of the crypto market have been facing their first sustained pullback in the time following BTC’s rally up towards its all-time highs.

The rejection right below these highs, coupled with fear stemming from Treasury Secretary Steve Mnuchin’s comments regarding a new wave of crypto regulations, have both hampered its price action.

Bears are taking increasing control over its price action, and where it trends in the near-term may depend largely on how bulls continue responding to the $17,000 level.

Bitcoin Descends Below $17,000 as Bulls Struggle to Find Support 

At the time of writing, Bitcoin is trading down just over 2% at its current price of $16,850. This marks a notable decline from the cryptocurrency’s recent $17,600 highs set a handful of days ago.

Where the entire market trends in the mid-term may depend largely on whether or not it remains below $17,000 for an extended period of time.

This level has been strong support throughout the past 24-hours, but the buying pressure here appears to be dissolving.

A sustained bout of trading here could result in the entire market seeing some massive near-term downside.

BTC Sees Massive OI Cleansing During Course of Recent Drop 

Throughout the course of the ongoing decline, Bitcoin has seen a massive decline in open interest within the derivatives and futures market.

In aggregate, $1 billion in OI was wiped out as a result of this move lower. It also led to record trading volume and $1.5 billion in long positions for all tokens being liquidated – trends that one analytics platform spoke about in a recent tweet:

“BTC yesterday: – $1 billion of Open Interest wiped out – record trading volume: $66 billion on futures and $7 billion on spot – $900 million longs liquidated – $1.5 billion longs liquidated on the entire futures market (all coins, all exchanges).”

Image Courtesy of Coinalyze.

This could ultimately help the crypto see more sustainable growth in the future, as high OI can often lead to immense turbulence in both directions.

Featured image from Unsplash.
Pricing data from TradingView.

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