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Cryptocurrency News Articles
Bitcoin (BTC) Open Interest Surges, Raising Concerns of Potential Market Overheating:Analysts
Oct 02, 2024 at 11:01 pm
The recent surge in Bitcoin (BTC) open futures contracts has analysts concerned that the market might be showing signs of frothiness.
Recent data shows a surge in Bitcoin ( BTC ) open futures contracts, with analysts expressing concerns that the market may be displaying signs of frothiness.
“BTC open interest (OI) has surged, crossing $35 billion, a level that has historically coincided with local price tops,” Bitfinex analysts stated in an Oct. 1 report.
Bitcoin OI has dropped by around 9% since crossing the $35 billion mark. Source: CoinGlass
Bitcoin OI — the total number of Bitcoin futures contracts that are yet to be settled or expire — is a key metric used by investors to gauge market sentiment and anticipate future price movements.
On Sept. 27, Bitcoin OI reached $35.52 billion, marking the highest since June 7 when it clocked in at $37.69 billion, as per CoinGlass data. At the time, Bitcoin was trading close to its all-time high, at $70,759, before pulling back almost 18% over the next 30 days to $58,239.
The analysts go on to say that this “raises concerns of potential market overheating.”
Since Sept. 27, Bitcoin open interest has decreased by about 9% to $32.32 billion, and the BTC price has also dropped toward $60,000 amid escalating tensions in the Middle East.
At the time of writing, Bitcoin is trading at $61,629, down by 4.36% over the past seven days, according to TradingView data.
Bitcoin pulled back down toward $60,000 after recently reclaiming the $65,000 price level. Source: TradingView
The pullback is within a range that Bitfinex analysts believe won’t derail the bullish momentum.
“A minor 5-10 percent pullback could reset OI without disrupting the overall uptrend,” they opined.
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