Bitcoin’s 2% drop wipes out $4.21 billion in OI and penalizes altcoins, what will be the next step?

• The price of Bitcoin triggered a rapid decline of 2.05% on Friday.
• Despite the small decline, altcoins took a hit and fell by double digits.
• BTC’s uncertainty has created a dilemma over whether to buy or sell during the dip.

THE cryptocurrency The market has been extremely sensitive to Bitcoin (BTC) price movements as of late. The recent collapse has caused altcoins to post double-digit losses. While some say this could be a good opportunity to buy on the dip, others warn of an impending sell-off.

Read also: Bitcoin sets the stage for potential “fiat currency destruction”

Understand the prospects of the cryptocurrency market

Bitcoin price movements have been instrumental in controlling cryptocurrency market sentiment. But lately, the altcoin sector has become extremely sensitive to cryptocurrency pioneers. On Friday, BTC fell 2.05%, which caused major altcoins to drop 20%.

Altcoin performance

Due to this highly sensitive connection between BTC and altcoins, Open Interest (OI) dropped from $50.93 billion on Thursday to $46.85 billion on Sunday. This drop indicates that $4.21 billion in OI was wiped out due to Friday’s move.

OI of the cryptocurrency market

Following Friday’s market crash, $300 million worth of positions were wiped out. Of these, 254 million belong to the bulls.

Total liquidations

To know more: Bitcoin Weekly Forecast: BTC is in trouble, but $80,000 is within reach

What to expect next?

Altcoins are clearly looking at Bitcoin for a directional bias, let’s understand where BTC fits. As explained previously FXStreet PublicationsBTC’s short- and long-term market structure remains uncertain.

Crypto analyst and influencer Cold Blooded Shiller posted a tweet simplifying BTC’s directional bias.

1. According to him, BTC’s uptrend is intact in the daily and weekly ranges and needs to surpass $72,000 and establish a new high. If not, this could result in a move to $67,000.
2. If the $67,000 level is breached on the daily time frame, investors should pay attention to the $61,000 weekly support level.
3. Between these two levels there is no directional distortion. An upward break of $72,000 triggers the continuation of the uptrend. A weekly reversal of $61,000 will confirm a bearish market structure.

BTC/USDT 1 day and 1 week chart

To know more: Is BTC out of danger?

Until the price of Bitcoin provides a clear bias, it would be risky to invest heavily in altcoins. Therefore, the next few days are necessary

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