Bitcoin’s price has recently plummeted nearly 5%, hovering around $66,789 on October 26, as market dynamics shift amidst geopolitical tensions and speculation surrounding the stablecoin Tether (USDT) . The cryptocurrency faced local lows of $65,530 on Bitstamp, reflecting a broader risk-off sentiment fueled by escalating conflicts between Israel and Iran, alongside unverified allegations regarding Tether’s illicit usage .
Open Interest Plays a Key Role
Market analysts attribute this dip primarily to high open interest (OI) levels rather than the aforementioned news events. According to Luca, a prominent voice in the crypto community, the significant drop in OI—recorded as the largest since August—indicates that market makers are strategically flushing out positions before potentially pushing prices higher . This sentiment was echoed by Charles Edwards of Capriole Investments, who noted that Bitcoin continues to behave like a risk asset despite its potential to act more like gold during turbulent times .
Potential Liquidity Flush to $60K
Looking ahead, analysts are closely monitoring Bitcoin’s trajectory, with many predicting a possible decline toward the psychological support level of $60,000. Luca highlighted that there is considerable bid liquidity just below the current spot price, particularly around $61,500. He emphasized that if Bitcoin fails to maintain its position above $65K, it could expose the market to further declines towards $60K before establishing any local bottoms .
As Bitcoin navigates these turbulent waters, traders remain vigilant, assessing both market sentiment and technical indicators that could signal future price movements.
