Bitcoin (BTC) starts a new week with traders licking their wounds after a 10% snap crash.
BTC price action is struggling to recover from a manic end to the days prior to the weekend, and the fear is palpable going into what could turn out to be an equally volatile few days.
With $26,000 so far forming the focus for the markets, theories are brewing over where Bitcoin might head next.
Multiple factors are set to converge to provide some influence — United States macro data prints are firing up again, while the Federal Reserve will deliver key commentary on the economy at the annual Jackson Hole Economic Symposium.
Within Bitcoin, meanwhile, short-term holders now face increasing unrealized losses, and on-chain transactions in loss are setting multi-year highs.
Sentiment is back on the floor, but is the fear really justified?
Cointelegraph takes a look at these topics and more ahead of what promises to be an interest week for crypto markets.
BTC order book “ghost town” after OI obliterated
While many expected volatility to kick in around the Aug. 20 weekly close, Bitcoin in the end produced something of a non-event, data from Cointelegraph Markets Pro and TradingView shows, with $26,300 capping the extent of its upside.
A subsequent comedown took the market back to the $26,000 mark, where it traded at the time of writing.
After a week of mayhem, traders and analysts alike remained highly cautious on the outlook, with sources referencing various triggers for new downside.
“Traders still spooked, expecting more downside,” trading suite Decentrader wrote in an X update on Aug. 21.
Decentrader noted that traders were positioned short across exchanges after a major open interest wipeout during last week’s drop.
“Funding rates continue to be negative,” it added.
Maartunn, a contributor to on-chain analytics platform CryptoQuant, described Binance order book liquidity as a “ghost town.”
“This will open the door for volatility, in case you’ve missed it,” he suggested, alongside a chart showing liquidity and whale order volumes from monitoring resource Material Indicators.
Maartunn nonetheless reasoned that upside could come as a result, given historical precedent.
“In the entire history of Bitcoin, there were 11 times when Open Interest had a similar decline as three days ago. Among these eleven, eight led to increased prices, whereas three did…
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