In the past days, Bitcoin has been rising significantly. It reached $85,662 and gained 5% in the last 24 hours. Excitement is rising as everyone is waiting for BTC to hit $90,000.
Surge in Open Interest Raises Concerns
The open interest of Bitcoin has gone up by $16 billion in one week. It currently stands at $25 billion, which is the highest since August 2022. The open interest is a metric that measures the number of active contracts in the futures market. High open interest is generally a sign of a good market, but a rapid increase could lead to risk.
As an example of that, Bitcoin jumped 25% in one week, causing traders to take risky positions in bets and continued gains.
In the meantime, Bitcoin’s financing rate—a cost paid by traders with long and short positions—has increased to 0.015%, the highest level since March.
Bitcoin Appears Overbought on RSI Index
Another warning signal comes from Bitcoin’s Relative Strength Index (RSI), a popular tool for spotting overbought or oversold assets. BTC’s current RSI reads 74.83, indicating that it is overbought. When RSI levels exceed 70, traders often view assets as overpriced and expect a correction.
If Bitcoin does pull back, analysts suggest the price may drop to $81,215 initially. Failing this, the next possible support level is $74,340. On the upside, should buying pressure prevail, Bitcoin could re-test its high of $89,972 and potentially break into the $90,000 territory.
For now, traders should closely monitor these indicators as Bitcoin’s price continues to unfold.
