Bitcoin Surge Sparks Concerns Among Analysts

Bitcoin’s recent price surge has instilled hope in investors, yet seasoned crypto analysts advise caution in the face of growing apprehensions. As BTC's value rises, experienced traders point out indicators that suggest the upward trend may not be sustainable. They highlight potential risks and advocate for a prudent approach. Prominent traders have shared their perspectives concerning Bitcoin price dynamics and the reasons behind their careful stance.

Mounting Open Interest Raises Red Flags

According to crypto trader ZERO IKA, the recent surge in Bitcoin's price has been accompanied by a rise in open interest (OI) levels. Historically, when OI reaches around 180,000, it often foreshadows a price correction. Elevated funding rates during such periods typically create selling pressure in the market.

ZERO IKA observes a disparity between the current high OI and relatively low funding rates, indicating a potential imbalance between buyers and sellers. This imbalance may lead to a significant impulse to liquidate a substantial portion of leveraged positions, bringing the OI to healthier levels.

Bitcoin (BTC) Price Analysis

Echoing similar concerns, trader Roman notes the emergence of multiple bearish divergences on the 1-hour chart, alongside low volume on the daily timeframe. Roman expresses caution, stating that he lacks confidence in the breakout holding unless there is a significant increase in trading volume to support the upward momentum.

Both analysts stress the significance of Bitcoin closing above key resistance levels, such as $72,130 (previous swing high) and the $71,000 bearish order block, to reinforce the bullish outlook and potentially pave the way for a new all-time high.

As of the latest update, BTC is trading at $71,078.87 with a daily trading volume of $24,136,866,635.27. The current price reflects a minimal 0.01% decline in the last day and a 4.39% increase over the past week.

Market Sentiment

While the possibility of reaching new highs excites numerous investors, experts caution traders about the dangers of prematurely chasing breakouts. ZERO IKA advises against impulsive buying at elevated price levels, warning traders to exercise caution and avoid succumbing to fear of missing out (FOMO) when entering positions.

The article "Bitcoin Surge Sparks Concerns Among Analysts" originally appeared on CaptainAltcoin.