A crypto analyst on Twitter with the identity CrediBULL Crypto has predicted a short-term bearish movement for Bitcoin. According to the crypto analyst, Bitcoin traded under a significant resistance zone and below an aggregate open interest (OI) level could be considered a danger zone.
CrediBULL Crypto shared a chart analysis highlighting critical areas on the Bitcoin chart that influenced his prediction. They include a CME gap, a supply region, and a support level. However, the most crucial indicator influencing CrediBULL’s prediction is the OI level, which he noted to have a lot of room for fulfilling a short-term downward price movement.
The confluence of events shared by CrediBULL suggests Bitcoin price would fill the CME gap below it. It also indicates the price will drop along with the OI until it achieves a bottom. Ultimately, CrediBULL projected the price would drop further if the support of around $25,000 breaks.
Focusing on the OI metric, CrediBULL considers it a crucial indicator in monitoring how trends develop. In an earlier post, he explained that aggregate OI oscillates between the 10 billion and 6 billion figure levels. According to the analyst, traders use the metric to mark local tops and bottoms in a trending market. Hence, when the OI reaches 10 billion, the traders respond by liquidating long positions, and prices drop.
On the contrary, CrediBULL explained that when the OI falls toward the 6 billion level, there is an exhaustion in the liquidation of long positions. At such times, prices begin to move back up healthily. So, traders use this metric to match the price and make decisions.
Moreover, CrediBULL noted the OI was at 8.6 billion, with more room to drop lower. In addition to other metrics, the analyst concluded that Bitcoin’s price would likely drop lower in the short term.
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Source: Cryptocurrency - investing.com
