Crypto

Bitcoin Surges to $105,000, But Market Overheating Could Trigger a Crash

12
Bitcoin BTC 1

Bitcoin has made a strong recovery above $105,000 after a sharp dip to $98,000 earlier this week.

The cryptocurrency briefly surpassed $106,000 but has since settled at around $105,700, showing a 4% increase in the last 24 hours.

Despite this positive price action, rising Open Interest is raising concerns among investors.

The Role of Open Interest in Bitcoin’s Rally

Open Interest refers to the total number of active BTC-related positions on centralized derivatives exchanges.

A sharp increase in Open Interest suggests that more positions are being opened, potentially introducing higher leverage into the market, which could result in greater volatility.

CryptoQuant analyst Maartunn pointed out that the rapid rise in Open Interest during Bitcoin’s recent price recovery could signal a problematic trend.

The surge in Open Interest means that many investors are taking on more leverage, which increases the risk of mass liquidations and sudden market shifts.

What’s at Risk?

While Bitcoin’s price surge may seem promising, the overheated derivatives market could trigger violent liquidations if the price retracts, leading to a sharp pullback.

Historically, such conditions have been a precursor to market squeezes, which could reverse the rally in a matter of moments.

Investors are left wondering whether the rally can sustain itself despite these warning signs or if the leveraged positions will eventually cause the market to crash. The coming days will be crucial to determining the future trajectory of Bitcoin’s price.

Written by
Sazid Kabir

I've loved music and writing all my life. That's why I started this blog. In my spare time, I make music and run this blog for fellow music fans.

Related Articles

Cryptocurrency ― Bitcoin, Ethereum, Ripple
Crypto

Ethereum, Bitcoin Retreat on Trump Trade Tariff Reinstatement

Bitcoin and Ethereum slipped Thursday after a U.S. federal appeals court temporarily...

Cryptocurrencies ― Bitcoin Ethereum
Crypto

Crypto Market Loses $ Billions as Solana, XRP, Dogecoin Fall

The crypto market faced a sharp pullback over the last 24 hours,...

BTC - Bitcoin
Crypto

Post-Bitcoin Conference Price Drops Are Predictable—And So Are the Rallies

Veteran crypto analyst Miles Deutscher has drawn attention to a striking trend:...

Bitcoin BTC 1
Crypto

$84.2M in Bitcoin Withdrawn from Binance: What Are Whales Planning?

Two newly created Bitcoin wallets have withdrawn a combined $84.2 million (800...