Here’s what it means for market volatility

Bitcoin topped $75,000 on Wednesday and $76,000 on Thursday morning, setting a new record high before stabilizing near $74,500. Market experts remain optimistic about the cryptocurrency’s growth potential, fueled by expectations of a pro-crypto stance from the Donald Trump administration.

The data also suggests that significant volatility may continue in the short term, as reflected by Binance’s OI.

Register open interest on Binance

Binance Open Interest (OI) hit a new all-time high of $8.3 billion in the past 24 hours. According to the latest analysis by market intelligence firm CryptoQuant, the figure reflects an increase of 10.24%. Binance now accounts for roughly 35% of the total $23.3 billion OI across all exchanges.

This sharp increase in OI indicates a potential increase in market volatility, as large changes in open interest, especially those exceeding 3% in 24 hours, are often precursors to liquidations in the futures market. Open interest represents the total number of long and short positions outstanding in the market, and an increase like this indicates that both positions could be under pressure as volatility peaks.

“Remember that the OI metric represents the total number of long and short positions open in the market. Sharp increases in OI suggest that as volatility increases, both long and short positions could face greater pressure, which could lead to liquidations.”

The crypto market is riding high on Trump’s impressive comeback, with several indicators showing increased optimism. One notable metric, the Coinbase Premium Index, rose, hinting at a possible increase in demand for Bitcoin in the US. Additionally, in just one hour on November 6, 11 newly created whale wallets withdrew a whopping 1,807 BTC, worth around $132 million, from Binance.

Bitcoin bulls need this move to avoid pullback

Meanwhile, crypto analyst Ali Martinez has issued a cautionary note for Bitcoin investors as the TD Sequential indicator recently showed a sell signal on Bitcoin’s 4-hour chart, suggesting a possible pullback to $72,000. According to Martinez, the appearance of this signal indicates that Bitcoin’s recent rally may face a temporary reversal and latecomers to the bull market should be cautious.

However, the analyst added that the critical level to watch is close to $75,400. If BTC were to hold above this threshold, it would invalidate the current bearish setup, and could set the stage for a rally towards $78,000.

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