Bitcoin’s performance this week has been strong, with a potential surge towards the $70,000 level. However, analysts have pointed out that market data, including open interest contracts and loans, suggests that a pullback could occur at any time.
Amid the dual effects of the Fed’s liquidity injection and expectations of a rise in October, Bitcoin broke through the $68,000 level on October 16th, reaching a high of $68,422, the highest since July 30th.
At the time of writing, Bitcoin has experienced a brief correction but has once again risen above $68,000. During the early morning hours in Taiwan, it even briefly exceeded the $69,000 mark before temporarily falling back to $68,395. While it appears that the bull market is returning, this has also prompted warnings from analysts.
Analyst James Check from Glassnode reminded investors that the current market sentiment is greedy, and Bitcoin futures open interest contracts have reached a new high, indicating that a market pullback could occur at any time.
Similarly, trader Rekt Capital stated that the current upward momentum of Bitcoin does not necessarily mean a breakthrough of resistance and an imminent surge. On the contrary, based on technical indicators, Bitcoin is still attempting to break its downtrend since March. In the past few months, Bitcoin has made two attempts but ultimately failed to break through. Whether it will finally break through this key resistance level remains to be seen.
Another noteworthy data point is the significant increase in high-risk cryptocurrency loans, which have reached the highest level in two years, according to IntoTheBlock. These loans, defined as having a liquidation price within 5%, amounted to $55 million this week, the highest since June 2022. IntoTheBlock commented that this could indicate potential liquidation cascades if the market undergoes a significant change.
(Images: included)