Bitcoin price could bounce back from catastrophic drop below $50,000

Analysts are bullish on Bitcoin, expecting it to recover from its recent drop below $50,000. Derivatives traders have lost interest in Bitcoin; however, BTC circulation remains bullish. 

Bitcoin price is at a make-or-break point after drop below $50,000

Based on data from Glassnode, Bitcoin open interest rate on BitMex perpetual contracts has hit its lowest point in a year. The open interest rate is considered an indicator of investor sentiment. 

Currently, the open interest has hit $385 million in perpetual contracts. Perpetual contracts are different from futures contracts since they can be held for an indefinite period of time. The last time there was a drop in Bitcoin open interest on derivatives exchanges, the asset plummeted from $54,000 to $49,000. 

Analysts have noted a drop in Bitcoin's market share. Bitcoin dominance has slipped below 40%, hitting its lowest point since February 2018. While altcoins and memecoins are capturing a larger crypto market share, Bitcoin dominance has dropped to 37.8%. 

Analysts at Santiment, the crypto intelligence platform, have evaluated the Bitcoin price trend and expect a bounce back above the $50,000 level. After hitting a 24-hour low below $49,300, Bitcoin shows the potential for a bounce. 

Bitcoin token circulation is the metric that measures the amount of unique Bitcoins moving around the network. The metric's seven-day trend line is at the highest point since the past six months. This indicates healthy Bitcoin circulation and fuels a bullish narrative for BTC price. 

BTC supply across exchanges is in a downtrend, and the two metrics together (Bitcoin token circulation and supply) have turned analysts bullish on Bitcoin price. 

FXStreet analysts are bullish and predict that Bitcoin price could rebound to test resistance at $55,000.