The declining trend in December continues in the crypto market. The past day was pretty bad for most coins. With a few exceptions, the majority of large, mid and small cap coins are trading in the red in the early hours of Friday morning.

In a sense, the crypto king triggered a widespread market decline. In fact, BTC has lost more than 13% in value over the past week. So for the market sentiment to change from bearish to bullish, the Bitcoin price must rise and eliminate losses.

Have we entered a bear market?

Less than a week ago, on December 4th, the market experienced a massive decline. Global crypto market cap is down more than 14% in just 24 hours. Since then, many in the community have assumed that Bitcoin has entered a bearish phase.

A few weeks ago, Bitcoin seemed likely to break the $ 100,000 mark in December, but now, in the dire state of the market, the macro-bullish structure looks fragile. If the declining intensity increases over the next few days, it will surely be broken.

So, in order to know what could happen next, it is necessary to measure market sentiment and keep an eye on the activities of the participants. To do this, it is important to analyze the state of the Bitcoin futures market, as the spot market often follows the futures market.

The open interest (OI) of Bitcoin futures contracts has been on a downward trend since the beginning of this month. Open interest typically hovers around $ 25 billion in the first half of November. Currently, however, that number is only about $ 15 billion.

A decrease in open interest essentially means that traders are gradually closing positions. It also shows that new traders are currently showing little interest in entering the market.

With not a lot of new money flowing into the market at this point, it will be difficult for BTC to get out of the stagnation phase and move forward.

BTC Futures Open Interest | The source: Crookedness

Unsurprisingly, the volume of long liquidations over the past day has gradually dwarfed the volume of short liquidations with significant margins. This implies that the market favors the bearish traders.

Total liquidation | The source: CoinGlass

In order for the Bitcoin price to recover during this phase, the bulls have to intervene. The negative sentiment could be erased to some extent if the bulls make some bullish moves near the moving averages – around $ 50,000. However, if that fails, the downtrend will pick up and Bitcoin is expected to return to $ 46,000 in the next few hours.

While current market conditions and trader sentiment remain flat, the bearish scenario is overwhelming the bullish scenario for now.

BTC / USDT | Source: TradingView

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