News

Bitcoin Open Interest Moves In “Danger Zone”, What Shall Investors Do?

Bitcoin's open interest surges after a price drop below $37,500, suggesting increased volatility in the near future.
Published by
Bitcoin Open Interest Moves In “Danger Zone”, What Shall Investors Do?

Bitcoin is currently facing downward pressure, trading 1.17% lower at $37,300 levels, accompanied by a market cap of $729 billion. The potential for more Bitcoin liquidations increases as the BTC price falls below $37,500, leading to a notable surge in Open Interest (OI).

Bitcoin Open Interest In Danger Zone

Popular crypto trader CrediBULL crypto points out a significant rise in the Open Interest (OI) for Bitcoin derivatives. This indicates that many leveraged traders positioned themselves for this price drop instead of being cleared out of the market (washed out). This is less than ideal because it suggests that leveraged positions are still prevalent, leading to increased market risk.

The analyst added that the mention of OI being back in the “danger zone” suggests that the market is in a precarious state with high leverage, signaling the potential for more volatility. He points out that this increased volatility doesn’t necessarily provide a clear direction for the market.

The two possible scenarios mentioned are a “major short squeeze” (a rapid increase in price due to short sellers covering their positions) or a “continued flush back down” (a sustained decline in price).

If there’s a short squeeze leading to a price rebound above a certain level (37.6k), it might be safe to enter a position. On the other hand, if there’s a long squeeze and the price continues to decrease, there could be an opportunity to buy at a lower price.

Two Possible Scenarios for BTC

Crypto analyst illustrates two possible scenarios on a standard chart, here’s the current analysis:

  1. Reclaiming Local Lows Scenario: If the market successfully rebounds and reclaims the recent local lows, consider taking short liquidations (liqs) targeting the range of 38k to 38.2k.
  2. Failing to Reclaim Local Lows Scenario: If the market fails to recover and does not reclaim the recent local lows, consider taking long liquidations (liqs) in the range of 36.6k to 36.9k.
Advertisement
Share
Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

Published by
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Recent Posts

  • News

Markets Expect October Fed Rate Cut as Bitcoin Repeats Post-FOMC Pattern

Bitcoin traders are preparing for a rise or fall in the price of Bitcoin, as…

October 29, 2025
  • News

Trump Tariff: China Resumes U.S. Imports After Agreement With South Korea

Trump tariff tensions have begun to ease as China resumed purchasing U.S. agricultural products for…

October 29, 2025
  • News

BlockDAG Hype Surges as Coinbase and Kraken Listing Rumors Spread

Conversations around BlockDAG, a multi-utility project currency currently in its presale stage, have gained more…

October 29, 2025
  • News

Bitget’s Institutional Volume Hits $23.1 Billion as UEX Framework Gains Global Momentum

Bitget has registered a significant increase in institutional trading volume at $23.1 billion. According to…

October 29, 2025
  • News

Breaking: Grayscale Joins Bitwise, Launches Solana ETF Covering Spot and Staking Features

Grayscale Investments has officially launched its Solana ETF, joining Bitwise after its successful debut yesterday.…

October 29, 2025
  • News

FOMC Meeting Today: Where to Watch and Key Expectations for Crypto Market

Global investors, including those in the crypto market, await key cues from the FOMC Meeting…

October 29, 2025