liquidation risk
One reason for concern is the risk of long-term liquidation of Bitcoin. According to one trader kingfisherRecent volatility has made hedging more expensive and leverage more expensive. Traders using high leverage are particularly at risk.
The current Bitcoin price is around $68,400, and traders who bought with 50x leverage at this level have not yet been liquidated. However, TheKingfisher estimates that there is a 62.48% chance of it being liquidated within 24 hours.
Traders also noted that it is growing. liquidity pool Can trigger a “Darth Maul Candle”. The term refers to sudden and drastic price movements that can lead to rapid liquidation.
Chart Patterns and Market Mood
Another popular voice cryptocurrencyMichael van de Poppe agrees that Bitcoin could adopt a similar stance to what it has shown over the past seven months. He recently shared a chart showing Bitcoin rising above $68,000. Van de Poppe said Bitcoin “sucked up demand-side liquidity” and fell to around $64,130 before the asset rose again.
But what adds to the intrigue is the surge in Bitcoin futures open interest. Yesterday, October 16th, CME Bitcoin Futures hit an all-time OI high of 179,745 BTC, worth about $1.2 billion. According to some analysts, this could actually lead to a price drop that forces traders holding long positions to liquidate their positions.
Mixed views on open interest
Not all traders see an increase in open interest as a negative sign. A Bitcoin trader known as Wicked has a more optimistic outlook. Wicked believes that an increase in OI is a sign of bullish momentum. This sentiment is echoed by CoinGlass, a platform that tracks cryptocurrency futures. According to CoinGlass, a rise in futures OI indicates a significant price move is imminent and could push prices higher rather than lead to a decline in prices.
Summary of key concerns:
|
apprehension |
explanation |
|
liquidation risk |
High leverage traders are at risk of liquidation as volatility increases. |
|
market patterns |
Bitcoin may fall to gather liquidity before rising higher. |
|
Open interest |
A surge in Bitcoin futures OI could indicate a price decline, but opinions differ. |
Bitcoin traders remain cautious when navigating potential risks. While some are concerned about falling prices, others believe the market can remain strong.