Can record open interest spark Bitcoin’s Liquidity Flush?

Important points

• Bitcoin crosses the $120,000 threshold as traders increase liquidity either side of spot price.

• Bulls are addressing each other in the analysis “imbalance” The market will rise.

• Bitcoin’s future bull run is being questioned by long-term bearish divergences.

BitcoinBTC() gained $120,000 in support on Friday at the Wall Street opening as analysts prepared for another short squeeze.

Trader eyes $123,000 BTC liquidity

Useful Data Cointelegraph Markets Pro You can also find out more about the following: TradingView On the same day, BTC volatility was lowered.

BTC/USD has reached new highs in the local market, and the current level of $121,100 is the one to beat.

CrypNuevo is a well-known trader and he has commented on current market conditions. He believes overhead ask liquidity will be the next likely target.

“Liquidations at $120k have been hit,” he summarized a part of his latest analysis On X. 

“Now we’re in this Liquidity Pool (LP) which represents an imbalance in the chart and needs to be fully retraced ($123.2k).”

The Data of CoinGlass Additionally, bids totaled around $118.500. This represents potential support if the market were to correct.

Popular trader BitBull said that a possible retracement could be due to an increase in open interest (OI) on derivatives markets.

“In the next 1-2 weeks, BTC and alts will have a big leverage flush,” He predicted an outcome in part X post. 

“This’ll force people to sell their coins as they think that Uptober is over. After that, Bitcoin and alts will rally again and hit new highs.”

CoinGlass’ data puts the total OI of futures across all exchanges to a record-breaking $88.7 Billion on a single day.

Bearish divergences cause concern

Roman, a fellow trader, also pointed out that bearish was a sign of trouble to come. relative strength index Divergences in the RSI on weekly and daily timeframes. 

Related: What $110K gap? Bitcoin futures are ‘aggressively long’ as whales return

A bearish divergence occurs when RSI hits lower highs as price hits higher highs — something playing out around Bitcoin’s current $124,500 record.

“I wonder how long $BTC can ignore these bear divergences and lack of momentum on the 1W and 1M,” Roman queried Tuesday. 

“Volume is also telling us there’s a lack of strength. It’s only a matter of time before they play out. Be careful holding here.”

You can also read about the advantages of using Cointelegraph reportedRSI four-hour continues to sit “overbought” The territory reinforces expectations for a price drop in the near future.

This article contains no investment recommendations or advice. Each investment or trading decision involves some risk. Readers should do their own research before making any decisions.