Bitcoin's open interest has surpassed $15 billion, a notable development in the cryptocurrency market. However, an analyst has issued a warning, predicting a potential 20% decline in Bitcoin's price.
Bitcoin has achieved its highest open interest levels in over six months, but analysts are predicting that Bitcoin's price may struggle to surpass the $36,000 mark in the coming week.
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On November 7, the price of Bitcoin dropped towards $34,500, causing concerns among analysts who were closely monitoring the rising open interest in Bitcoin markets.
BTC/USD 1-hour chart. Source: TradingView
The cryptocurrency struggled to regain support at $35,000 and lacked a clear direction heading into the Wall Street opening. Analysts noted that the surge in open interest on derivatives markets, which saw nearly 10,000 BTC added in open interest (equivalent to around $350 million USD) in a single day, could indicate an impending increase in volatility. This spike in open interest coincided with noticeable fluctuations in the market.
As of the time of this report, open interest had reached almost $15.5 billion, with major exchanges such as CME and Binance witnessing record-high open interest figures. This trend suggests increased participation in Bitcoin futures, signifying either a shift in market sentiment or a move by investors to employ protective strategies. However, the implications of this rising open interest are met with uncertainty.
J.A. Maartunn, a contributor to CryptoQuant, noted that Bitcoin open interest had previously led to 20% price declines when it surpassed $12.2 billion. The situation was described as deserving "significant attention."
BTC/USD annotated chart with OI. Source: J.A. Maartunn/X
In the short term, analysts are cautious about Bitcoin's price prospects, with the consensus being that $36,000 remains a challenging resistance level. Despite this, they do not rule out the possibility of a subsequent break above this level. The week ahead was expected to bring additional market volatility, but the exact direction of that volatility remained uncertain.
