The price of Bitcoin has seen a significant decline that coincides with a record increase in open interest in the futures market, raising concerns among traders and analysts.
Bitcoin Price Decline
Bitcoin fell to $115,002, representing a drop of more than 6% from its record high of $120,000 reached on July 14. This decline occurred as traders opened new positions.
Surge in Open Interest
Open interest in Bitcoin futures contracts has reached a new record of $44.5 billion. This indicates that many traders are using leverage to participate in the growing market. The increase in open interest alongside a falling price makes the market more susceptible to volatility and potential liquidations.
Market Reaction and Technical Indicators
Technical indicators suggest that Bitcoin is under pressure, as the price has slipped below the middle line of the 20-day Bollinger Bands. This may indicate a possibility of further decline towards support around $109,000. The relative strength index has fallen to 52.58, reflecting weakening bullish momentum in the market.
The drop in Bitcoin’s price coupled with the rise in open interest highlights the current instability in the cryptocurrency market. Without a recovery above $120,000, further declines may pose a real threat to traders actively utilizing leverage.
