Bitcoin Extends Its Recovery From Lows of $83,804, Reaching Intraday Highs of $88,804

Bitcoin, the first and largest cryptocurrency by market value, extended its recovery from lows of $83,804 on Sunday into Monday

Bitcoin, the first and largest cryptocurrency by market value, continued its recovery from lows of $83,804 on Sunday into Monday, reaching intraday highs of $88,804.

Bitcoin generally stayed around $85,000 during the weekend, hㅐving been curtailed by concerns about inflation and the broader U.S. economy.

At press time, Bitcoin is trading at $88,599, showing an increase of 4.24% over the previous 24 hours, while most other cryptocurrencies are trading in the green.

Bitcoin's recent price surge has been accompanied by a rise in open interest, which has triggered the issuance of a Bitcoin market alert as leverage increases on the market.

BTC Market Alert: Leverage-driven pump“Open Interest (OI) hit record levels above $32B as BTC price surges near $87.5K. But here's the catch: High OI + Rapid Price Increase = Risk of Liquidation Cascades!” – By @IT_Tech_PL Full post ⤵️https://t.co/BzEOKHgPLI pic.twitter.com/DHL0MGedSRAccording to CryptoQuant, as Bitcoin approached $88,000, open interest (OI) reached record highs above $32 billion. While this may appear positive at first glance, there's a caveat: high open interest and rapid price appreciation increase the risk of liquidation cascades.

Should the rally continue, FOMO (fear of missing out) could propel Bitcoin into a parabolic move. However, if the bulls lose momentum, it might result in a sharp correction as over-leveraged positions are liquidated.

In this vein, CryptoQuant is advising the crypto community to keep a close watch for sudden shifts in open interest (OI) and observe Bitcoin's price action.

More volatility ahead?

An increase in futures open interest on Binance has contributed to the Bitcoin OI surge, highlighting the market's optimistic sentiment and signaling potential for sustained gains.

According to data from CoinGlass, open interest on the Binance exchange's BTC-USDT futures experienced a surge of nearly 7,000 BTC ($614.6 million) during the early Monday trading session. Highlighting this development, CoinGlass noted in a tweet that "about 7,000 BTC open interest was added on Binance futures." Open interest refers to the number of active (or pending closure) futures contracts at any given time.

"This is a good sign, volatility is coming," CoinGlass remarked, highlighting the significant spike in futures open interest.

Furthermore, Binance funding rates have remained positive, indicating a bias towards leveraged bullish (long) bets.