In the last few days, Bitcoin has been riding the bullish wave as the general market gains traction, maintaining a good price range between the $101,000 and $106,000 levels. Even though BTC has shown remarkable resilience and growth, several key metrics have turned bearish lately, which may impact upward momentum.
Declining Open Interest Delta Poses Threat To Bitcoin
Amid positive performances, Bitcoin’s key metrics are crucial in determining its next price trajectory. Meanwhile, the Bitcoin Open Interest Delta metric is showing signs of weakness, triggering speculations about the sustainability of the current price momentum.
This key indicator measures the next change in open interest across derivatives markets, which points to diminishing trader confidence as leverage positions wane. A drop in the metric might lead to short-term volatility, causing prices to drop back to key support levels.
Advanced investment and data analysis platform Alphractal has spotted the growing weaknesses across the 90 and 180-day time frames. According to the platform, the weakness in these time frames suggests that institutional players are closing their positions.
The platform highlighted that Bitcoin has previously seen price declines of up to -50% from its peak in a matter of weeks after a notable increase in these deltas and a subsequent weakness. Considering past implications, BTC’s recent upward momentum might lose steam in the coming weeks, with a potential 50% price decline.
As a result, Alphractal outlines that monitoring this metric on a daily basis is crucial because persistent drops could indicate an impending reset in the cryptocurrency market. Furthermore, the platform warns of possible liquidation in both long and short positions. In the meantime, using little or no leverage in the current scenario is considered to be a great strategy to reduce the risks of being liquidated.
BTC’s Upside Momentum Building As Chart Pattern Emerges
Despite key metrics declining and posing a threat to recent growth, BTC continues to demonstrate potential for an upward move. Technical expert and trader Jonathan Carter has predicted a breakout for the asset in the short term, targeting the $112,000 price mark.
Jonathan Carter predicted the move as the cryptocurrency forms a key chart pattern on the 4-hour chart, particularly the Symmetrical Triangle formation. This consolidation phase indicates a battle between bulls and bears, with the expert citing an imminent significant breakout on the upside to new highs.
Should bullish momentum prevail and BTC break above the pattern, the expert is confident that the asset could rally toward targets such as $107,300, $109,400, and $112,000. A new all-time high for BTC might change market dynamics, reigniting the ongoing bull cycle.
Presently, BTC has witnessed a sharp pullback to about $99,934 after facing strong resistance at the $106,900 level. Despite the pullback, investors seem to be capitalizing on the move as evidenced by a more than 87% surge in trading volume in the past day.
