The Bitcoin open interest has remained on the high side despite the price declines, suggesting that interest in the leading cryptocurrency by market cap remains abundant. This interest is no doubt a good thing for the crypto market, especially in the long-term. But looking back at previous trends involving the Bitcoin open interest, it is concerning that the value is still so high and this could hinder a recovery for the Bitcoin price from here.
Bitcoin Open Interest Still Above $56 Billion
Data from the Coinglass website shows that the Bitcoin open interest is still quite high and not far off from its November 2024 highs after the BTC price hit a new peak above $109,000. This consistently high open interest signifies traders still taking considerable positions in the digital asset despite its price falling over 20% since then, something that could be a hindrance to recovery.
The total Bitcoin open interest is currently sitting at $56.17 billion, falling approximately 22% from its all-time high of $71.85 billion. This shows a close correlation between how much the price has fallen compared to the open interest. However, the open interest remaining this high could have some negative implications for the BTC price and the crypto market by extension.
For example, looking at the chart above, it is obvious that Bitcoin has seen its largest moves upward when the open interest has been low. This suggests that the lack of market pressure gives bulls the space to push the price upward. Hence, with the open interest still so high, it could be much harder to push the price higher. Given this, the BTC price could see further decline before there is more recovery from here.
BTC Price Crash Below $70,000 Imminent?
Besides the Bitcoin open interest remaining high, a crypto analyst has also given reasons why the BTC price could see a crash from here. The first factor given is the fake bullish divergence. According to the analysis, the RSI may be showing a bullish divergence but the price action isn’t following it. Hence, this could lead to a bull trap, pulling traders into losses as the price crashes.
Another factor given is the fact that the Bitcoin price has broken a trendline support after falling to the low $80,000s. This suggests that bullish momentum is weakening and the recent recovery might not hold.
Given the factors listed above, the crypto analyst expects the Bitcoin price to fall another 20% from here. The target is placed at $69,149, which is an all-time high from 2021. “This level coincides with the intersection of the mid-channel support line and horizontal price structure,” the analyst explains.
Featured image from Dall.E, chart from TradingView.com
