In the past day, Bitcoin [BTC] broke through consolidation and rebounded to the $110,000 level. However, shortly after, the market slightly retreated and eventually stabilized at $109,162.
This sudden pullback has caught the interest of CryptoQuant analyst Axel Adler, who predicts that Bitcoin will fall further based on open contracts.
It is worth noting that Bitcoin's open contracts have significantly decreased by $1 billion. Such a large decline indicates massive liquidations and reduced leverage as investors strategically exit the market.
The decline in open positions resulted in a negative net recipient count, reflecting the dominance of sellers in the market, which caused prices to retreat from $110,000.
The dominance of sellers is also reflected in the Bitcoin buyer-seller ratio, which has fallen to negative territory for the first time in four days.
The negative buyer-seller ratio indicates that sellers have entered and dominate. Therefore, the contract for difference (CVD) of Bitcoin spot remains positive, reflecting high profit realization in the spot market.
Thus, as Bitcoin rises to $110,000, investors in the spot market are shifting toward taking profits, while investors in the futures market decide to reduce leverage.
Therefore, spot market traders are mostly selling, putting downward pressure on prices.
The same pattern is also reflected in trading activity, which has turned positive after a decline in recent days.
As of the time of writing, the net inflow of Bitcoin into exchanges is 12,000 BTC, reflecting an increase in exchange inflows. This means that most holders and investors are putting their Bitcoin into exchanges.
These situations indicate that the market remains cautious, as some investors worry about a pullback occurring again.
Is a pullback inevitable?
As observed above, some market participants see the recent price rise as an opportunity to take profits, while futures market participants have significantly reduced leverage.
After sellers entered the market, downward pressure formed, leading to a price pullback.
If the current situation persists, the same pattern will continue, and the price chart may decline further. A further pullback would cause Bitcoin to retest the support level of $107,000, which previously acted as resistance.
If this level fails to hold, BTC will return to $106,000, as predicted by Adler.
However, if bulls continue to focus on higher resistance levels, they may start buying again and absorb the pressure from the futures market. If they hold, the market will rebound to $110,000 and aim for $112,000 again.