About 7,000 Bitcoin (BTC) open interest was added to Binance futures, which was a sign of more volatility to come. That, however, led to a 6-month spike in volatility.
Bitcoin (BTC) Open Interest and Its Impact on Volatility
Analysis of the 5-minute BTC/USDT chart from Binance Futures showed a 7K BTC increase in OI, which raised the value to 308.79K BTC at $19.6 Billion.
Bitcoin price grew to $87,441.20 from $83,000 when OI surged to 308.79K BTC and simultaneously increased 7K BTC. It represented a 5.4% increase.
The surge in OI was deduced from the heightened trading volume, coinciding with a positive Funding Rate of 0.003081%.
It indicates a bullish investor attitude in this market. The price rise closely matched the ΟΙ increase, suggesting new position openings drove market buying activity.
Historically, similar OI increases often triggered market shifts and volatility. During October 2023, a 5K increase in OI initiated a 10% price rise that lasted 2 days, while a 7K increase in 2021 saw 15% gains in one week.
However, the termination of OI positions at a rapid rate could lead to a market pullback to $85,000.
The rise in OI coincided with an increase in Bitcoin volatility, reaching 52.31% for 30-day periods. It was this quarter’s highest, as the “BTC Volatility (365d)” chart depicted.
Market volatility was at its lowest point at 24.79% from February 17th to 24th. BTC’s increasing market activity coincided with this volatility peak registered during its steep price rise.
Previous price fluctuations followed these peaks of volatility in market history. The market saw a 50% volatility spike, which resulted in a 20% price decline in 2021 and the 2023 CPI price rise to $110,000 before a follow-on 10% market adjustment to $85,000.
Core PCE data release could drive BTC prices as high as $110,000 and volatility as high as more than 60%. However, less favorable outcomes would most likely initiate $85,000 price drops.
Scalp traders have the opportunity to capitalize on these conditions through enormous risks and rewarding opportunities.
Bitcoin Price Action and Prediction
Looking at the price action, Bitcoin maintained an ascending bottom pattern in the market. That sustained bullish momentum as it reached the $85,000 resistance threshold.
The price escalated progressively from $80,000 to its summit at $87,441.20 while creating new higher highs at $80,000, $82,000, and $84,000.
Despite the strength of this pattern, Bitcoin needs to stay above the $85,000 resistance mark, which proved resistant on multiple occasions.
The analysis suggested a temporary correction could precede an expected price rise. An increase in selling pressure might cause BTC price to drop to either $82K or $80K before continuing its uptrend.
The price of Bitcoin should stay above $85,000 to achieve $90,000 by the end of the week under ongoing bullish market conditions.
The upward trend remained intact based on the rising support levels, though $85,000 was established as the main steering point for market movement.
The post 7K BTC Open Interest Added On Binance, Volatility Hits 6-Month High—What’s Next? appeared first on The Coin Republic.
The Coin Republic – Read More