The analyst warned that if Bitcoin continues to fall and fully enters a bear market, open interest could contract further,
Bitcoin News
According to CryptoQuant analysis, open interest in Bitcoin derivatives has declined 31% since October, creating a deleveraging signal that historically marks market lows and sets the stage for a potential bullish recovery.
The analyst warned that if Bitcoin continues to fall and fully enters a bear market, open interest could contract further, signaling deeper deleveraging and a potential extension of the correction. Open interest refers to the number or value of crypto derivatives contracts that remain unsettled and open.
This short squeeze scenario may be bullish because it suggests that the price rise is driven by spot buying rather than excessive leverage, making the rally more sustainable. Bitcoin spot prices have increased by almost 10% since the start of this year, confirming this theory.
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