Bitcoin has demonstrated bullish momentum, crossing the $66,000 mark. However, analysts caution that the asset may be in a high-risk zone due to a significant increase in Open Interest. Open Interest tracks the total BTC-related positions on derivatives exchanges. A rise in this metric suggests higher leverage, potentially leading to increased price volatility.
Recent trends show that high Open Interest is often followed by bearish movements. Analysts warn against opening new long positions in the current high-risk zone. The current surge in Open Interest resembles past instances where the market became overleveraged, leading to mass liquidation events and increased volatility.
The Bitcoin price rally has been accompanied by a notable increase in Open Interest, indicating accumulation of long positions. Analysts suggest watching how Bitcoin develops in the coming days to determine if it will face a correction similar to previous patterns.
