bitcoin (btc) fell to $34,500 on November 7 as analysts’ attention focused on rising open interest.
Open interest ‘rise’ spooks bitcoin experts
Data from Cointelegraph Markets Pro and TradingView showed the btc price trajectory struggling to regain $35,000 as support.
The largest cryptocurrency lacked a clear direction at the Wall Street open, but market participants predicted volatility would return soon.
The reason, they said, was a sharp rise in open interest (OI) in the derivatives markets.
“Almost 10 thousand btc (~$350 million USD) in open interest was added today. Fireworks coming soon,” financial commentator Tedtalksmacro. foretold up to date.
As Cointelegraph reported, open interest reaching high levels has coincided with bouts of volatility in recent months.
Commenting at current levels, which totaled nearly $15.5 billion at the time of writing according to data from glass coinJames Van Straten, research and data analyst at crypto insights firm CryptoSlate, described the fluctuations as “notable.”
“The CME exchange, favored by institutional investors, has reached a new record in open interest, with 105,380 btc contracts open, valued at $3.68 billion. “Binance has surpassed this figure with open interest of approximately 113,500 btc,” he noted.
“This trend points to increasing participation in bitcoin futures, suggesting a positive change in market sentiment or a move towards protective strategies by investors.”
JA Maartunn, a contributor to on-chain analytics platform CryptoQuant, shared the sense of uncertainty about how the OI phenomenon would develop.
bitcoin – Low Term
The open interest in bitcoin?src=hash&ref_src=twsrc%5Etfw”>#bitcoin futures are rising. Certain apes are taking important positions, but it is not clear to me whether they are going long or short. pic.twitter.com/47anTWRAaA
— Maartún (@JA_Maartun) November 7, 2023
In the previous day’s analysis, he suggested that OI was now in territory that had previously seen btc price drops of 20%.
“Historically, every time this metric exceeded $12.2 billion, it resulted in a minimum 20% drop in the price of bitcoin,” he said. wrote at X, saying OI deserved “significant attention.”
Analysis: $36,000 btc Price ‘Off the Table’ This Week
Continuing the coverage, popular trader Skew referenced the importance of current price levels in low time periods.
Related: Excessively High: bitcoin Ordinals Send btc Transaction Fees to New 5-Month Peak
Whoever is “wrong” in direction, he told X subscribers, will face difficulties, fueling a potential volatile price reaction.
$btc
Looks like a short covering bounce hereSome OI also come off the lows here https://t.co/R7fglUGthX pic.twitter.com/S6d0QuhCTi
— Skew Δ (@52kskew) November 7, 2023
Looking ahead, follow-up material resource indicators concluded that $36,000 would remain the upper limit for the time being.
“Declaring a local high of $36k doesn’t mean >$36k is off the table this year, but the metrics I’m looking at indicate that, at the very least, it’s off the table for this week,” part of X’s analysis. November 6 read.
“That decision also doesn’t mean the price will free fall back to the previous range of $25,000 to $28,500, but if a bullish breakout isn’t validated this month, that low of the range is critical.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.
