Bitcoin (BTC) has experienced a 1.23% decrease in the past 24 hours, reflecting a market value of 729 billion dollars. Presently trading around 37,300 dollars, the cryptocurrency indicates susceptibility to selling pressure. The situation suggests that as long as BTC remains below the 37,500 dollars level, an increase in Open Interest (OI) is anticipated, potentially leading to additional liquidations. In light of these conditions, two possible scenarios for BTC are worth considering.
Bitcoin’s OI in a Dangerous Zone
Experienced cryptocurrency analyst CrediBULL has highlighted a notable rise in Open Interest (OI) for Bitcoin derivatives. This shift implies that, rather than a widespread elimination of leveraged investors from the market, these investors are actively taking positions anticipating a price decrease. The observation indicates a substantial number of leveraged positions, signaling increased market risks and less-than-ideal conditions..
The analyst also highlighted that the resurgence of Open Interest (OI) into the danger zone signals an unstable state in the cryptocurrency market, characterized by high leverage and heightened volatility. Furthermore, the increased volatility doesn’t offer a clear direction for the market.
Presently, there are two plausible scenarios for BTC. The first scenario involves a significant short squeeze, marked by a rapid price increase as short sellers cover their positions. The second scenario envisions a sustained pullback, indicating a continuous decline in price. If a short squeeze unfolds, leading to a recovery above 37,600 dollars, an intense rebound is expected. Conversely, if a long squeeze occurs, a sharp price decline in the opposite direction of a short squeeze can be anticipated.
Two Possible Scenarios for BTC
CrediBULL has outlined two potential scenarios on the standard price chart for Bitcoin. The first scenario involves the sweeping of local top levels. If Bitcoin successfully sweeps these last local top levels, a target range of $38,000 to $38,200 can be aimed for, resulting in the liquidation of short positions.
On the other hand, if local top levels are not swept, the analyst anticipates a price retreat to the range of $36,600 to $36,900, with a subsequent recovery from that point.