The recent decline in Bitcoin's price has led to a shift in market sentiment, but institutional investors remain confident.
Institutional Confidence in Bitcoin
Major U.S. institutions maintain confidence in Bitcoin, signaled by neutral and positive readings in the Coinbase Premium Index, indicating no selling pressure from institutional investors, who continue to hold or buy.
Open Interest Declines and Liquidations
Reduced open interest in Bitcoin signals market stress as traders' positions are liquidated due to leverage. The rapid price decline causes further liquidations of leveraged positions, bolstering temporary sales activity.
Negative Funding Rates and Bearish Sentiment
Negative funding rates across exchanges assess market sentiment toward bearish positions, potentially leading to short squeezes where aggressive sellers must buy back positions, causing a market recovery.
The Bitcoin market remains challenging, though institutional investors show confidence. A potential recovery may occur after stabilizing at new support levels.
