Crypto Market Likely to Consolidate, Declines Less Likely
CryptoNewsTerminal Staff06 Aug, 2024
Crypto Market Likely to Consolidate, Declines Less Likely
## Crypto Market Poised for Consolidation, Further Declines Unlikely Crypto analyst Jamie Coutts of Bloomberg Intelligence predicts that the crypto market is more likely to consolidate than experience further declines. This assessment is based on a recent drop in total open interest (OI) in crypto perpetual futures markets, which has fallen by a third from the previous day. Funding rates have also turned negative, indicating a decline in market sentiment. "This drop has wiped out $6 billion in OI, which now stands at $14 billion," Coutts reported. "That's a 37% reduction in OI in a week." Notably, on August 5th, $230 million worth of perpetual futures positions were liquidated, exceeding the liquidations during the November 2022 FTX collapse. However, this liquidation event still ranks as only the 78th-largest in the analyst's data set. Despite the recent market volatility, Bitcoin remains up 250% from its 2022 lows and has only retraced about 30% of its gains. This suggests that the market may be approaching a period of consolidation, rather than a prolonged decline.
