Bitcoin Slides Towards $34,500 Amid Rising Open Interest and Anticipated Market Volatility
Summary:
Bitcoin experienced a drop towards $34,500 on November 7, amid rising focus on the increasing open interest in the cryptocurrency market. Experts are predicting a return of market volatility due to the rapid increase in open interest on derivatives markets. The current levels, approximately $15.5 billion, signify a noticeable fluctuation with uncertainty presented over the potential outcomes. Market indicators suggest $36,000 will remain the temporary maximum limit for Bitcoin. The future of the Bitcoin market remains uncertain and potential investors are encouraged to conduct sufficient research.
On November 7, Bitcoin (BTC) slid towards $34,500 as experts turned their focus to the burgeoning open interest. Bitcoin's price trajectory is grappling to regain the $35,000 support line according to data from Cointelegraph Markets Pro and TradingView. The foremost cryptocurrency's direction remained ambiguous heading into Wall Street's opening, though market players anticipated an imminent return of volatility. This prediction was due to a significant rise in open interest on derivatives markets.
Today sees the addition of almost 10k BTC (approximately $350 million USD) in open interest, signaling potential fluctuation, says financial commentator Tedtalksmacro. As Cointelegraph pointed out, periods of volatility in recent months have coincided with peaks in open interest. James Van Straten of crypto insights company CryptoSlate examined current levels, nearly $15.5 billion at the time of reporting according to CoinGlass data, and labeled the changes as "significant."
Van Straten noted that "the CME exchange, favored by institutional investors, set a new open interest record with 105,380 BTC contracts, equivalent to $3.68 billion. Binance has slightly surpassed this with an open interest of around 113,500 BTC. This growing interest in Bitcoin futures indicates either a favorable shift in market sentiment or a move towards safeguarding strategies by investors."
Contributor to on-chain analytics platform CryptoQuant, J. A. Maartunn, was also unsure about the possible outcomes of this open interest surge. In an analysis the previous day, he pointed out that the current OI levels are now within the range that has previously led to a 20% drop in BTC price. According to Maartunn, OI should be subject to "serious consideration" since a significant price decrease in Bitcoin has typically followed when this metric surpassed $12.2 billion.
Renowned trader Skew, noticing the significance of the current prices on short time frames, stated that changes could be challenging and may provoke a potentially volatile price reaction. Looking forward, Material Indicators determined that $36,000 would momentarily serve as the maximum limit. They clarified that a local peak at $36K wouldn't necessarily mean a price above that is impossible this year, but their metrics suggest it's unlikely for the current week at least.
This news story refrains from providing investment advice or recommendations. Each investment or trading maneuver comes with inherent risks, urging readers to diligently research before deciding.
Published At
11/7/2023 1:03:23 PM
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