Bitcoin surged past the $120,000 mark, reaching an intraday high of $122,300 — just shy of its all-time high at $123,000. After weeks of strong upward momentum, the move represents a bullish continuation. This gives traders hope that a record-breaking price could be near. Investors are cautious, however, and warn that the current rally could be a relief rally, before another consolidation period.
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CryptoQuant’s latest data adds another layer of complexity in the outlook for the markets. After a sharp rise in average weekly open interest to over 20% — peaking on July 14 — the metric has since dropped significantly, now turning negative. This suggests that the short-term appetite for risk has decreased, which could reduce speculative activity in near term.
Although open interest declines may not be inherently negative, they could indicate that the market is cooling down after periods with aggressive leverage. Open interest declines, particularly when coupled with an increase in liquidations, can precede attractive purchasing opportunities. Bitcoin is near a record for now highs The market is a mix of promise and danger. In the coming sessions, it will be determined whether or not the market continues to rise.
Closed Interest Signs of Cooling Risk Appetite
Darkfost, a top analyst in the market has provided fresh insights. insightsThis shift is reflected in the derivatives market for Bitcoin. His analysis shows that the average weekly change in open interest is -2.2%. This represents a dramatic reversal of the levels reached just a few weeks earlier, when the level was +20%. The drop in open interest shows that traders’ short-term appetite for risk has diminished. Many participants have reduced leveraged positions following an extended bullish trend.
This development is largely driven by liquidations. Darkfost explains that a sudden drop in open interest, coupled with a surge of liquidations can create a profitable window to make long-term entries. This is usually the case when positions that are overleveraged have been liquidated. Stronger hands can then accumulate at more favorable prices. It is not a buy signal but it can be used to gauge market conditions, and identify potential favorable entry points.
Ethereum is pushing towards all-time records, which has increased the attention on the wider crypto market. Bitcoin’s continued stability over the $120K mark, along with the improving sentiment in altcoins sets up a potential for strong results to follow. Before committing larger positions, traders are going to be closely monitoring derivatives metrics for any signs of increased leverage or cooling.
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Bitcoin tests key resistance just below all-time high
Bitcoin surged up to $121,337. It marks the strongest breakout since its previous consolidation phase. Bitcoin now stands at its highest ever level, surpassing its $123K all-time record. The daily chart reveals a clear move over the $119K area, which confirms the bullish trend after the support of the 50-day average at $114.155.
This rally brings BTC within striking distance of the $123,217–$124,000 resistance area, a critical zone that previously capped upside attempts in July. If this barrier is breached and closed daily, it may be possible to reach a record-breaking high.
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Bitcoin’s performance will have a major impact on the broader market, as Ethereum is close to its record-high and other altcoins are showing renewed strength. BTC could ignite a massive market surge if it manages to maintain a steady move above $124,000. In the event that BTC does not break above $124K, there may be a period where it consolidates before making its next move.
Chart by TradingView. Image by Dall-E.
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Source: www.newsbtc.com
