Bitcoin's Surging Open Interest Raises Concerns of Whipsaw Effect on Price
- Bitcoin's open interest surged over $2 billion in 3 days, potentially triggering price volatility.
- Increased open interest suggests more traders speculating on Bitcoin's price.
- Positive funding rates indicate a possible "whipsaw" effect on Bitcoin's price.
- Bitcoin's open interest reached $36.92 billion on June 6, a significant jump.
- High open interest can lead to price swings and influence trader sentiment.
- Bitcoin's price at $70,890, up 4.23% in the past week and 10.42% in the past month.
Summary :
Bitcoin's open interest (OI) has surged over $2 billion in just three days, leading traders to believe it may trigger a sudden "whipsaw" effect on its price. Open interest refers to the total number of derivative contracts that have not been settled, and a rise in OI suggests more traders are speculating on the asset. The sudden spike in Bitcoin's OI and the continuation of positive funding rates suggest the likelihood of whipsaw action on the price of Bitcoin, which is when there is a sudden price spike in the opposite direction of the current trend. Bitcoin's OI jumped $2.02 billion over the three-day period, reaching $36.92 billion on June 6. A large amount of open interest can potentially increase price swings and influence traders' sentiment. Bitcoin's price is currently trading at $70,890, up 4.23% over the past seven days. However, if the price sharply retreats by 4% to $68,000, approximately $1.96 billion in long positions could be wiped. Traders expect significant volatility in Bitcoin's price as it enters price discovery soon. It is important to note that this article does not contain investment advice or recommendations, and readers should conduct their own research before making any decisions.
Sources :
- CoinTelegraph
