The cryptocurrency market experienced a strong rally as Bitcoin's price reached $87,500, driven largely by leverage and record-high open interest.
Rally and Risks
Following the new peak at $87,500, Bitcoin's price has faced unexpected fluctuations as Open Interest surpassed $32 billion. This suggests heightened trading activity but also increases the risk of liquidations that could cause significant price swings.
Two Possible Scenarios
Bitcoin's market situation suggests two possible outcomes: a continuation of the upward trend if levels hold strong, or sharp corrections due to liquidations if bulls fail, setting the stage for a chain reaction of sell-offs.
Key Indicators to Watch
The current volatility requires monitoring of price and Open Interest changes. An unchecked rise in Open Interest without support from spot markets could lead to a price decline. Meanwhile, high funding rates indicate excessive leverage, warning of potential pullbacks.
The question remains whether Bitcoin can surpass $90,000. Extreme market volatility is expected in the coming days due to the peak leverage levels.
