Bitcoin (BTC) Price Analysis for August 17: BTC Market Will Likely Maintain Its Current Bearish Form

The month of August has been largely uneventful for Bitcoin (BTC) so far, with the premier cryptocurrency having struggled to reclaim the $65,000 price

CryptoQuant analyst XBTManager has shared some interesting revelations regarding the state of the BTC market. According to the analyst, the BTC market is still showing signs of bearishness.

On August 16, XBTManager reported that Bitcoin’s Spot-Perpetual Price Gap, as tracked on the Binance exchange, is continually in a negative form indicating that the asset may record more price loss due to a sustained selling pressure.

To understand this better, a Spot-Perpetual Price gap occurs when there is a difference between the valuation of Bitcoin on the spot market which deals with the asset’s actual price, and on the perpetual markets which allow traders to deal in speculations of the Bitcoin’s future price.

When the perpetual price is lower than the spot price as in the current case of Bitcoin, it indicates traders are massively offloading the asset in the perpetual futures market as they believe there could be an incoming price fall.

This usually leads to a scenario where traders sell their assets at a lower price in the perpetual futures market and buy it at a higher price in the spot market to take advantage of the arbitrage and make a profit.

However, in this case, since the perpetual price is lower than the spot price, traders will sell their assets at a higher price in the perpetual futures and buy it at a lower price in the spot market.

As a result of such a reaction, deep liquidation hunts might occur i.e. where a large number of leverage positions are forcefully closed down, leading to a larger negative Spot-Perpetual Gap, and increased selling activity.

But XBTManager has also highlighted a potential positive for Bitcoin in this uncanny situation. The analyst states that high selling pressure will likely result in an accumulation of multiple short portions on Bitcoin.

Therefore, the instance of a sudden price gain might force these positions to close leading to some significant buying activity that could reduce the current negative Spot-Perpetual Price gap.

BTC Price Overview

At the time of writing, BTC trades at $58,981 with a 2.28% gain in the past day. However, the token’s daily trading volume is down by 16.37% and is valued at $29.5 billion. On larger time frames, BTC also remains in the red zone with a loss of 2.92% and 8.76% over the last seven and thirty days respectively.

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