On Oct. 26, Bitcoin hovered around $67,000 after recent news events caused a nearly 5% dip in its price.
Data from Cointelegraph Markets Pro and TradingView captured Bitcoin hitting local lows of $65,530 on Bitstamp, just before the Oct. 25 daily close. This drop coincided with increased geopolitical tension between Israel and Iran, as well as unconfirmed allegations from the Wall Street Journal regarding potential illicit use of the largest stablecoin, Tether (USDT). Though Tether quickly dismissed these accusations, market sentiment turned risk-off.
However, many market observers believe the more significant factor impacting Bitcoin’s price was open interest (OI) rather than news headlines. Popular X account Luca weighed in, saying, “Now most people say the drop was because of some US investigation over the USDT stablecoin, which couldn’t be further from the truth. In my opinion, the drop wasn’t caused by the news. The drop was caused by the high OI, which market makers are trying to flush out before they take the price higher.”
Data from Glassnode, an on-chain analytics firm, showed that the single-day OI decrease on Oct. 25 was the largest since August. Charles Edwards, founder of Capriole Investments, commented on Bitcoin’s risk-asset behavior, saying, “Blows my mind that Bitcoin still trades like a risk asset. Bitcoin will trade like Gold in these events one day.” He added, “On the plus side, 10000 BTC Open Interest wiped in minutes, now back at the same level as when Bitcoin was trading at $59K.”
As BTC/USD approaches a critical test with $70,000, some analysts anticipate further dips. Luca, looking at liquidity on the Liquidation-Heatmap, noted, “If we look on the Liquidation-Heatmap, we can clearly observe how bulls tried to catch the local bottom this whole week, failing each time, as there were highly leveraged positions.” He warned that if Bitcoin loses support around $65,000, “the next support range at 60K gets exposed.”
