Originally published on: October 17, 2024
Bitcoin traders are feeling uneasy as the cryptocurrency’s price has surged by 11% in the past week, raising concerns about a potential dip before reaching new record highs.
TheKingfisher, a well-known trader, highlighted the current trading activity around $68.4k, noting a connection to previous volatility in late July when prices plummeted to $49k within days. This spike in Bitcoin volatility has led to increased hedging costs and pricier leverage, hinting at a possible retracement in the market.
According to TheKingfisher, even traders using 50x leverage are at risk of liquidation with a high chance of prices moving downwards. The expanding liquidity pool could trigger a sudden exit known as a “Darth Maul candle,” adding to the uncertainty in the market.
Michael van de Poppe, founder of MN Capital, shared a chart indicating a potential drop in Bitcoin’s price to collect demand-side liquidity around $64,130 before resuming an upward trend. The recent surge in Bitcoin Futures open interest has also raised concerns among analysts about a possible pullback to clear out long positions.
While some analysts view the surging open interest as a bullish sign for Bitcoin, others remain cautious. Wickedsaid that the record-high OI on CME Bitcoin futures suggests further positivity for the cryptocurrency, while CoinGlass sees it as a precursor to a significant price movement.
As the market remains volatile, it’s essential for traders to conduct thorough research and make informed decisions before investing. Stay updated with critical insights and investment opportunities by subscribing to the Markets Outlook newsletter every Monday.