The main reason for bitcoin’s fall below $ 30,000 is revealed

Analysts from the Korean company CryptoQuant have named the reasons for the drop in the market value of bitcoin below the psychologically important level of $ 30,000.

Experts said that the drop in the price was caused by market overheating. CryptoQuant came to this conclusion based on the ratio of two futures market indicators: open interest rates and funding rates.

The «open interest» indicator measures the total number of futures contracts on the HTS that are currently open on derivatives exchanges. When the value of the indicator increases, it means that investors are now opening new contracts. However, in most cases, as open positions grow, leverage increases, and this trend can lead to a more volatile crypto asset price.

Another relevant indicator is the «financing rate». This is the name of the payments that traders in the futures market exchange with each other. When the indicator has a positive value, it means that long positions are currently being paid for by short positions, and bullish sentiment prevails in the market. Negative values show that the majority shares a bearish outlook.

According to CryptoQuant’s chart, the number of open long positions exceeds the number of short positions, which means that there is a significant open interest and a high probability of position liquidation.

During the day, about 40,000 BTC traders liquidated their positions, and the total amount of such transactions reached $ 122.39 million. The largest single liquidation order worth $ 3.03 million was recorded on Binance. At the time of writing, BTC is trading at $ 29,659.