Bitcoin Open Interest Turns Negative as Risk Appetite Diminishes
Bitcoin surpassed $120,000, hitting an intraday high of $122,300, approaching its all-time high of $123,000. This rise indicates bullish momentum but experienced investors caution that it may represent a relief rally before further consolidation.
Recent data from CryptoQuant show a significant drop in average weekly open interest from over 20% to negative. This reflects reduced short-term risk appetite, potentially dampening speculative momentum.
- Open interest declines can signify cooling phases after aggressive leverage.
- Such pullbacks, especially with increased liquidations, might present buying opportunities.
Open Interest Signals Cooling Risk Appetite
Analyst Darkfost reports the current weekly average open interest change at -2.2%, contrasting sharply with previous +20% levels. This decline suggests traders are reducing leveraged positions following an extended bullish phase.
Darkfost notes that substantial drops in open interest alongside spikes in liquidations may indicate favorable entry points for long positions as overleveraged trades are eliminated. Monitoring these metrics is crucial for assessing market conditions.
As Ethereum approaches all-time highs, Bitcoin's stability above $120K and improving altcoin sentiment may lead to strong follow-through in the coming weeks. Traders will closely watch derivatives metrics for signs of renewed leverage or further cooling.
Bitcoin Tests Key Resistance Just Below All-Time High
Bitcoin reached $121,337, breaking out from recent consolidation and nearing its all-time high. The daily chart confirms bullish momentum, having held support at the 50-day moving average around $114,155.
This movement brings BTC close to the critical $123,217–$124,000 resistance area. A daily close above this level could trigger new all-time highs and additional upside momentum.
Bitcoin's performance in the next sessions will be crucial for overall market sentiment. Sustaining above $124K may catalyze a market-wide surge, while failure to break higher could lead to consolidation before the next move.