Bitcoin (BTC) traders have encountered a relatively challenging period following the straightforward rallies that characterized the market since last October.
Meanwhile, Ethereum (ETH) has experienced a more intricate journey. However, BTC's halving event last month has altered market dynamics, leading to choppy and ranging formations across the market.
Investors are expecting strong returns in the near future for one of the two
Although the Bitcoin Open Interest increased on May 10th, it has been declining from the price peak on May 6th.
The price, which fell from $64k to $61.1k at press time, has likewise produced a sequence of lower highs during the past week.
Back in May, when Bitcoin had fallen to $56,000, the Funding Rate was negative. Afterwards, there has been a recovery in the funding rate.
It has been somewhat above zero in the last three days, though, suggesting that mood was not overly positive.
In early May, Ethereum experienced a decline in Funding Rates, slipping into negative territory, but has since recovered. Throughout the past week's downtrend, the funding rate remained around the baseline of +0.01.
A minor uptick in price from $2980 to $3040 on May 9 led to increases in Open Interest and the funding rate for Ethereum.
Interestingly, this trend did not mirror Bitcoin's behavior despite experiencing a similar price bounce. This discrepancy suggests that speculators showed a greater inclination to long Ethereum (ETH) compared to Bitcoin (BTC).
Which liquidity spots are the next to draw interest from prices?
A prominent cluster of liquidations was visible in the $60k region of the 7-day Bitcoin liquidation heatmap. The next optimistic targets are $61.8k and $63k to the north.
Prices surged beyond $64,000 on May 5th in order to gather liquidity prior to a severe short-term decline.
In a similar vein, Monday's drop to gather liquidity near $60k might be followed by a rise. As a result, Bitcoin traders should look to purchase the drop to between $50.6k and $60k.
In addition, traders need to position their stop-losses appropriately in case the price of bitcoin dips to $60k and be ready for a slide below $59.4k.
Ethereum (ETH) currently has a cluster of liquidity positioned nearby to the north, around the $2950 mark, which is close to the current market price of $2928. In the event of a dip to the $2860 region, it could potentially offer a buying opportunity for traders.
Looking ahead, the liquidation levels situated around the $3.1k-$3.2k area represent an appealing target for traders.
However, it's important to note that if the price drops below $2.8k, it could signal the beginning of a strong short-term downtrend. In such a scenario, traders may consider cutting their losses to mitigate further risk.
May 2024, Cryptoniteuae