According to a recent post of Cryptoque Quicktake by the Avocado_onchain contributor, Bitcoin (BTC) can be started for an extended rally. The open interest of cryptocurrency for the term market approaches historically high levels – a trend observed during previous bull markets.
Bitcoin’s open interest continues to climb
Like BTC Bords closer To $ 100,000, the interest opened for the long -term market increases rapidly. A graphic shared by Avocado_onchain illustrates that the current peak in the models of open interests observed in the previous bull cycles.
The analyst noted that in the previous cases, when the open interest of Bitcoin broke out above a previous peak – highlighted in red – it was quickly followed by a significant price wave, as shown by yellow arrows and green circles on the graph.
Although the current level of open interest has not yet exceeded the previous summit, the abrupt ascending trajectory suggests that it could soon do it. If this level is violated, there is a high probability that the price of BTC can follow the plunge and exceed its top of all current time (ATH).
Financing rates remain largely stable
Despite the optimistic prospects, Avocado_onchain warned that excessive open interest can create an overemparotic environment, RELAUNCH The risk of liquidation and volatility events. However, BTC financing rates remain largely stable for the moment.
For uninitiated financing rates, financing rates are periodic payments between long and short traders in perpetual term contracts, intended to maintain prices of contracts aligned on the cash market. In the context of the BTC, positive funding rates indicate more demand for long, while negative rates suggest more shorts demand.
Currently, overall financing rates through term exchanges show a slight long bias without reaching overheated levels. Interestingly, Binance – The greatest exchange of crypto in negotiation volume – shows a short domination of the bias, helping to maintain market balance.
Crypto analyst Ali Martinez echoes this feeling. In a recent job On X, he noted that 63.76% of traders on Binance are currently positioned short. This reinforces the idea that the current increase in open interest reflects a healthy positioning rather than an excess speculative.
In addition, the boomed ride of Bitcoin has sparkled Bullish signals in key indicators on the chain. The MVRV ratio, a metric often used to assess the feeling of the market, began to climb – another sign of increasing confidence in investors.
Likewise, the Bitcoin Sott indicator recently flashed Green, a signal which historically preceded major rallies. At the time of the press, BTC is traded at $ 97,569, up 0.5% in the last 24 hours.
Star image of Unsplash.com, cryptocurrency graphics and tradingView.com
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