Crypto News- At present, Bitcoin grapples with downward pressure, registering a 1.17% decline at $37,300, alongside a market cap of $729 billion. The risk of heightened Bitcoin liquidations looms as the price dips below $37,500, triggering a notable surge in Open Interest (OI). Notably, CrediBULL crypto, a prominent crypto trader, highlights a substantial uptick in Bitcoin derivatives’ Open Interest (OI), signaling that many leveraged traders anticipated and positioned themselves for the market downturn instead of being washed out.
Bitcoin Open Interest Enters Risky Territory: A Guide for Investors
This scenario raises concerns, indicating that leveraged positions persist, thereby amplifying market risk. Describing the OI as back in the ‘danger zone,’ the analyst underscores the precarious state of the market characterized by high leverage, suggesting heightened potential for increased volatility. Notably, this surge in volatility doesn’t distinctly point toward a definitive market direction.
The analyst outlines two potential scenarios: a ‘major short squeeze,’ marked by a rapid price surge due to short sellers covering their positions, or a ‘continued flush back down,’ indicating a sustained decline in price. In the event of a short squeeze leading to a rebound above a specific level (37.6k), entering a position might be considered safe. Conversely, if a long squeeze unfolds, resulting in a continued price decrease, an opportunity to buy at a lower price could emerge.
Leave a comment