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Cryptocurrency News Articles
Bitcoin seems to be at a crossroads. As crypto approaches 70,000 dollars, a speculative frenzy is developing in the shadows. A phenomenon that could very well turn against it in the short term. With the explosion of open interest in the futures markets, B
Oct 22, 2024 at 06:10 pm
Bitcoin crossed the threshold of 69,500 dollars on October 21, a milestone marked by euphoria. However, behind this spectacular rise, doubts are beginning to emerge.
Bitcoin seemed to be at a crossroads on October 21. As the price of the leading cryptocurrency approached the $70,000 threshold, a speculative frenzy was developing in the shadows—a phenomenon that could turn against BTC in the short term.
With the explosion of open interest in the futures markets, BTC was indeed in a high-risk situation. The question was whether the current bullish momentum would hold up against this rampant speculation.
A tense rise in the price of bitcoin
Bitcoin crossed the threshold of $69,500 on October 21, a new milestone that was reached with euphoria. However, behind this spectacular rise, doubts began to emerge.
This level had not been reached for months, and market participants were more nervous than ever. The political context, particularly the potential impact of the U.S. elections, seemed to play a major role. Some analysts even mentioned a correlation between the rise of bitcoin and Donald Trump’s chances of winning the presidential election.
Be careful, this skyrocketing price was not without risk. Indeed, open interest (OI) on futures contracts reached historic highs.
However, such an increase in open positions was not always synonymous with stability for bitcoin. If traders’ speculations did not materialize, a brutal correction could hit the market, reversing the current bullish momentum.
The snowball effect of open interest
As indicated in the report, the explosion of open interest was not just a simple technical detail.
In theory, high OI reflected growing optimism, but here, it could provoke an opposite effect. If the spot market did not follow the expected bullish momentum, we could witness a bitcoin correction of unexpected violence.
The market then became vulnerable to what was called a “short squeeze,” where open positions were liquidated in cascade, increasing volatility.
The most worrying thing was that the fundamentals seemed to be eclipsed by this speculation. The more the market inflated with unfulfilled promises, the more severe the crash could be.
The coming days would therefore be decisive in determining whether Bitcoin would break through this resistance or if it would experience a return to reality that could shake the entire market. Some still hoped to see bitcoin at $80,000.
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Fascinated by bitcoin since 2017, Evariste has been continuously documenting himself on the subject. While his first interest was in trading, he now actively tries to apprehend all the advances centered on cryptocurrencies. As a writer, he aspires to permanently provide high-quality work that reflects the state of the sector as a whole.
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