Bitcoin, the leading cryptocurrency, continues to rise, reaching $88,804. This has triggered a market alert due to potential liquidation risks stemming from increased open interest.
Current Bitcoin Price Dynamics
Over the weekend, Bitcoin remained around $85,000, but entered the week with an upward trend, peaking at intraday highs of $88,804. This was accompanied by a rise in open interest, inciting cautious market sentiment amidst U.S. economic uncertainties.
Risk of Liquidation Cascades
According to CryptoQuant, high open interest along with rapid price increases enhances the risk of liquidation cascades. If the rally continues, it might trigger a parabolic move, but if bulls lose control, this could result in a sharp correction.
Impact of Open Interest on the Market
CoinGlass data reveals that open interest on Binance's BTC-USDT futures surged by nearly 7,000 BTC. This bolsters the market's upbeat sentiment and indicates potential for long-term gains. Positive funding rates on Binance also imply a propensity towards bullish positions.
The current Bitcoin market situation attracts investor attention, but potential liquidation risks due to high volatility and increased open interest must be considered.
