Bitcoin Reaches New Interim High of $71,700 – Is the Next Big Boom Ahead?

Bitcoin Reaches New Interim High of $71,700 – Is the Next Big Boom Ahead?

Yesterday, Bitcoin hit an impressive interim high of $71,700. Many are eagerly awaiting another breakthrough past the all-time high from March, with high expectations for a subsequent bull run. Analyst Sheldon, known from the Crypto Banter channel, sees this as a strong sign of market recovery. Despite minor concerns in the stock market, Bitcoin remains stable and continues to provide positive momentum. Particularly intriguing is the potential pressure on altcoins as Bitcoin leads the movement.

The key hurdle lies at $72,000. If this level is surpassed, it could signal a breakthrough to new all-time highs. Sheldon explains that the strong resistance at $65,000 has now shifted to around $72,000. A significant short squeeze could drive the market if Bitcoin surpasses its all-time high.

Currently, Bitcoin’s price fluctuates between $70,000 and $72,000, indicating a substantial resistance zone. This suggests it might take some time to reach $72,000 to $73,000. However, a breakout could lead to a rapid price increase.

Looking back at past cycles, a similar pattern of a brief downturn followed by an optimism phase can be observed. Sheldon emphasizes the importance of preparation and strategic market entry. At the time of writing, Bitcoin is trading slightly above $71,000.

Open Interest Surges Significantly

Another factor that could influence Bitcoin’s price is the sharp rise in open interest (OI) by over $2 billion within just three days. This development suggests that traders might anticipate a sudden “whipsaw” effect on the price.

Open interest refers to the total number of unsettled derivative contracts, such as options or futures, and an increase may indicate that more traders are speculating. According to data from CoinGlass, Bitcoin’s open interest jumped by $2.02 billion in three days, reaching $36.92 billion on June 6.

High open interest can potentially lead to more significant price fluctuations, especially if traders hold multiple positions and suddenly change their strategies. This can also affect the overall sentiment of traders who use open interest as a signal to decide whether to hold or sell their crypto assets.

Kelly Kellam, Director of the BitLab Academy, explained that the sudden rise in Bitcoin’s open interest and the continuation of positive funding rates indicate the likelihood of a whipsaw action – a sudden price move in the opposite direction of the current trend. He added that the increase in open interest, coupled with a consistently positive premium (everyone going leveraged long), is a recipe for a minor correction.

Oliver Harris