BTC Price Fluctuates as Market Makers Target Leveraged Traders
Bitcoin clung to the $67,000 range on October 26, after the price dipped 5% following fresh market jitters and renewed geopolitical tensions. This pullback saw BTC reach $65,530 on Bitstamp at the daily close on October 25, tracked by Cointelegraph Markets Pro and TradingView.
News of potential Tether misuse and escalating conflict between Israel and Iran amplified a risk-off sentiment, causing traders to react to the broader uncertainties. But popular analysts argue the headlines only scratched the surface of Bitcoin’s price action. For them, the real focus was on a different metric: open interest (OI).
High Open Interest Positions Pressured by Market Makers
For seasoned Bitcoin onlookers, market dynamics painted a more intriguing picture than the latest rumors. “Now most people say that the cause of the drop was because of some US investigation over the USDT stablecoin, which in fact couldn’t be further from the truth,” commented X user Luca, pointing to high open interest as the true catalyst.
He argued the drop was a targeted move by market makers looking to purge excessive leverage from the market. “Market makers are trying to flush out [high OI] before they take the price higher,” Luca continued. His theory aligned with data from onchain analysis firm Glassnode, showing the biggest one-day drop in open interest since August.
Charles Edwards, Capriole Investments’ founder, echoed this sentiment, suggesting Bitcoin’s current trade pattern shows its lingering risk-asset character. “Blows my mind that Bitcoin still trades like a risk asset. Bitcoin will trade like Gold in these events one day,” Edwards shared, referencing the 10,000 BTC in open interest wiped out within minutes. Following this, OI landed back at levels seen when BTC/USD floated around $59,000.
Bulls in a Bind: Leveraged Positions Face Liquidation Heat
Market-watchers are closely monitoring Bitcoin’s liquidation landscape, where bulls have been grasping for local bottoms to no avail. Luca noted that traders have piled up high-leverage positions below the $65,000 mark, and if this support breaks, a descent toward $60,000 looks likely.
Data from CoinGlass reinforced this setup, showing bid liquidity clustered below spot price, all the way down to $61,500. Luca’s Liquidation-Heatmap analysis highlighted the intense pressure on leveraged longs, with a “massive pile” of positions stacked just below $65K. Should BTC fall below this zone, the psychological support at $60,000 becomes exposed.
Speculation of a continued shakeout has led Luca to predict another downward flush to $60K. “Now that is what I personally think it’s going to happen, we will most likely see another flush to 60K before we can call for any local-bottoms,” Luca concluded, underscoring the volatility leveraged traders face.
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