Bitcoin’s trend this week has been strong, with a potential surge towards the $70,000 mark. However, analysts have pointed out that market data such as open interest contracts and loans suggest that a correction could happen at any time.
(Previous summary:
Bitcoin’s “exchange reserve” hits a new low, is the bullish signal reliable?)
(Background:
MicroStrategy’s brainless “leveraged long” strategy on Bitcoin, is it really a good strategy?)
Under the dual effect of the Federal Reserve’s stimulus and expectations of a rise in October, Bitcoin broke through the $68,000 mark on the 16th of this week, reaching a high of $68,422, a new price high since July 30th.
At the time of writing, Bitcoin has briefly retraced but has once again risen above $68,000. In the early hours of Taiwan time, it even briefly surpassed the $69,000 level and is currently temporarily falling back to $68,395. It seems that the bull market is returning, but this has also raised warnings from analysts.
Bitcoin trend. Image source: OKX
Analysts: A correction will still occur
However, facing the current upward trend, Glassnode analyst James Check also reminded investors yesterday (18th) that the current market sentiment is greedy, and Bitcoin futures open interest contracts have reached a new high, indicating that a market correction could occur at any time.
Bitcoin’s total open interest contracts reach $40 billion. Image source: Coinglass
At the same time, trader Rekt Capital also stated that the current upward momentum of Bitcoin does not necessarily mean a breakthrough of resistance and an imminent surge. On the contrary, from a technical indicator perspective, Bitcoin is still trying to break its downtrend since March. In the past few months, Bitcoin has attempted to break through this key resistance level twice but ultimately failed. Whether it will officially break through this critical resistance remains to be seen.
High-risk crypto loans reach the highest level in two years
Another noteworthy data point is that, according to IntoTheBlock data, in the decentralized lending market, so-called “high-risk” loans (defined as loans with liquidation prices within 5%) have reached $55 million, the highest level since June 2022.
Regarding this, IntoTheBlock commented that this could mean that potential liquidation cascades will come to the surface once the market changes.
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