Bitcoin (BTC) has seen a 1.23% decrease in the last 24 hours with a market value of 729 billion dollars, currently trading around the levels of 37,300 dollars, signaling that it is under selling pressure. As long as the price of the largest cryptocurrency remains below the level of 37,500 dollars, an increase in Open Interest (OI) is expected to continue, which could lead to more liquidations. Here are two possible scenarios for BTC.
Bitcoin’s OI in a Dangerous Zone
Experienced cryptocurrency analyst CrediBULL has pointed out a significant increase in OI for Bitcoin derivatives, indicating that instead of a washout of many leveraged investors from the market, they are taking positions based on the expectation of a price decrease. This means that the number of leveraged positions is quite high, suggesting that market risks have increased, and market conditions are far from ideal.
The analyst added that the return of OI to the danger zone indicates that the cryptocurrency market is in an unstable state with high leverage and points to higher volatility. Moreover, he noted that the increased volatility does not provide a clear direction for the market.
Currently, there are two possible scenarios for BTC. The first scenario involves a significant short squeeze (a rapid increase in price due to the short sellers covering their positions), while the second scenario is a continuous pullback (a constant decrease in price). If a short squeeze occurs that leads to a recovery above 37,600 dollars, a rapid and intense rebound can be expected. On the other hand, if a long squeeze occurs, a sharp decline in price in the opposite direction of a short squeeze can be anticipated.
Two Possible Scenarios for BTC
CrediBULL pointed out two possible scenarios on the standard price chart for Bitcoin. The first scenario is the sweeping of local top levels. In this scenario, if Bitcoin sweeps the last local top levels and successfully recovers, the 38,000 to 38,200 dollar range can be targeted, liquidating short positions.
If local top levels are not swept, the analyst expects the price to retreat to the range of 36,600 to 36,900 dollars and recover from there.
