Bitcoin’s price has been dropping, but surprisingly, investor interest remains high. This is shown by the stubbornly high open interest – the total value of outstanding Bitcoin futures contracts. Is this a good sign, or a warning sign of further price drops? Let’s explore.
High Open Interest: A Double-Edged Sword?
The Bitcoin open interest is still incredibly high, hovering around $56 billion. While this shows significant ongoing interest in Bitcoin, it’s also concerning. This level is only about 22% down from its all-time high of $71.85 billion, even after a price drop of over 20%.
Historically, Bitcoin’s biggest price surges have happened when open interest was low. Less market pressure means bulls have more room to push the price up. With such high open interest now, a significant price increase might be harder to achieve. This could mean further price declines before any substantial recovery.
Could Bitcoin Crash Below $70,000?
Adding to the concerns about high open interest, some analysts are predicting a further Bitcoin price drop. Their reasoning includes:
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Fake Bullish Divergence: Technical indicators like the Relative Strength Index (RSI) might suggest a price increase, but the actual price action isn’t confirming it. This could be a “bull trap,” luring investors into losses.
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Broken Support: Bitcoin’s price has broken below a key support level, indicating weakening bullish momentum and suggesting the recent price recovery might be short-lived.
Based on these factors, some analysts predict a 20% drop, potentially pushing the price down to around $69,149 – a significant level based on previous price action.
