Bitcoin May Be Headed Towards 20%+ Decline Based On This Pattern
07 November 2023 - 4:00PM
NEWSBTC
Bitcoin could see a decline of at least 20% in the near future, if
the historical pattern of this indicator is anything to go by.
Aggregated Open Interest Of Assets Except Bitcoin Is Forming A
Bearish Pattern In a new post on X, CryptoQuant Netherlands
community manager Maartunn has talked about a bearish pattern
forming in the aggregated open interest of all cryptocurrencies
except Bitcoin. The “open interest” here refers to an indicator
that measures the total amount of derivative positions (in USD)
that are open on all exchanges around the world right now. Related
Reading: XRP Enjoys 11% Rally As Sharks & Whales Hit 2023 High
Holdings When the value of this metric is high for any
cryptocurrency, it means that the asset has a high number of
positions on the derivative market currently. Generally, this kind
of trend makes it more probable for the price to show volatile
moves. On the other hand, low values imply the derivative side of
the coin in question is cool at the moment, which may suggest a
relative period of calmness for the price. In the context of the
current discussion, the aggregated open interest of all
cryptocurrencies excluding Bitcoin is of interest. The below chart
shows the trend in this indicator over the past couple of years:
Looks like the value of the metric has been rising in recent days |
Source: @JA_Maartun on X In the graph, Maartunn has highlighted an
interesting pattern that the aggregated open interest of the
altcoins and the Bitcoin price has followed in the last two years.
It would appear that whenever the indicator’s value has crossed the
$12.2 billion mark, the BTC price has observed a top formation and
has subsequently registered a decline. According to the analyst,
this drawdown that has followed the pattern has always been at
least 20%. Just this year, the tops of the cryptocurrency’s price
observed in February, April, and July all occurred during periods
where the metric was above the $12.2 billion level. From the chart,
it’s visible that the aggregated open interest of the sector
excluding BTC once again crossed above this line of historical
significance back when the asset’s rally toward the current levels
first happened. Since then, the metric has only continued to climb
higher and has now hit the $13.8 billion mark, meaning that the
derivative market has become quite overheated now. Related Reading:
Bitcoin Has Just Cleared A Level That Historically Lead To Rallies
Of 99%+ If the pattern that Bitcoin has displayed in the past is
anything to refer to, then the asset may be fast approaching the
top right now, given the overheated altcoin open interest. As
another analyst has pointed out on X, the dominance of the futures
open interest made up for by assets other than Bitcoin and Ethereum
has also hit 2023 highs. The metric's value appears to have gone up
in the last few days | Source: @WClementelll This once again puts
into perspective the overheated status of the market, which could
end dangerously for Bitcoin as well as the rest of the
cryptocurrency sector. BTC Price Bitcoin had made another go at
$35,000 in the last two days, but the asset has now once again
slipped below the level as it’s now trading around $34,700. BTC has
plunged during the past day | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, charts from TradingView.com,
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