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Bitcoin price drop to $56.5k can be a local bottom

Bitcoin price drop to $56.5k can be a local bottom. 19% price drop of the BTC was a local bottom because of low liquidation. The derivatives data also points towards the local bottom.

Bitcoin price drop to $56.5k:

The flagship currency, Bitcoin, has been bullish for more than two months. A little bit of price correction was seen in these two months. The price of BTC dived to the price of $56.5k by losing almost 20%. The first rule of BTC trading is that “Expect the unexpected”. The data shows that it wasn’t the first time that BTC lost almost 20%. There were five instances when BTC lost 18% in intraday trading.

Bitcoin price drop to $56.5k by losing 19% in a single day. The main reason for that it was a local bottom is the lack of liquidation event despite the sharp price move. Had there been excessive buyers’ leverage at play, a sign of an unhealthy market, the open interest would have shown an abrupt change, similar to the one seen on Sept. 7. Another reason for this to be a local bottom is discussed below.

Bitcoin price drop

The options markets risk gauge remained calm. Investors should analyze the 25% delta skew which tells about the sentiments of the professional traders. This matric turns positive when the neutral to bearish options is higher than the similar risk call option. This is defined as the fear scenario. The greed signal will be the opposite of it.

Bitcoin price drop

The provided chart is showing that the ratio was 7 on November 10 and then changed to 13 at the press time. More USDT is being borrowed and it is a bullish sign as a token being borrowed 13 times. Bitcoin price drop to $56.5k and it made a local bottom. The price of the derivate also hints towards it.

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About mnmansha

MN Mansha is a cryptocurrency expert, trader, and content writer with extensive experience in covering everything related to digital assets — from price analysis to Blockchain disruption. Mansha authored 100+ stories for NewsBSC.com and other fintech media outlets and he's actively writing more every day. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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