Bitcoin Plunges $1 Billion: Traders Beware of Bullish Trap!

• Bitcoin price plunged hard and tested support below $26,000 for the first time in 55 days.
• The RSI has dropped to levels not seen since June 2022 and BTC breaking the yearly trend line.
• More than 30% of open interest wiped out indicating money is flowing out of the market.

Bitcoin Price Plunge

The Bitcoin price plunged hard, testing the lower support below $26,000 for the first time in the past 55 days. The price, however, recovered above these levels in no time, which has not been validated as a bullish reversal. Rather, many believe the price could remain under consolidation for a while, beyond which it may trigger a healthy upswing.

RSI Levels

The recent price plunge has caused the BTC price to drop heavily, testing pivotal support levels. The RSI has dropped to levels not seen since June 2022. A similar price crash was observed then, which was followed by a bullish reversal. Further, the bulls were trapped at the interim highs, while the price maintained a steep bearish trend for the rest of the year. Presently, a similar price action during the same time frame appears to be repeating itself. Therefore, the larger possibility of the price plunging back to levels around $22,000 emerges after trapping the bulls at $30,000.

Yearly Trend Line

The Bitcoin price has been trading along a rising trend since beginning of this year acting as strong support. However due to excessive bearish pressure in last few weeks of every quarter resulted in breaking of yearly trend line with steep decline making it difficult for bulls to recover above it anytime soon .

Open Interest Wiped Out

Open interest is outstanding derivative contract that has not being settled yet ,recently more than 30% open interest wiped out indicating traders have closed their positions and money is flowing out from market triggering huge bearish clouds over bitcoin prices .

Why Traders Need To Be Cautious?

With such conditions prevailing in market traders need to be cautious if bitcoin triggers rebounce as there are high chances that it can cause another trap situation like what happened during june 2022 wherein after initial bullish rebound prices went down again creating steep bearish trends .