Bitcoin Open Interest jumps 8% – Why BTC price faces liquidation risks

Bitcoin's [BTC] latest recovery appears increasingly dependent on leveraged Futures buying rather than Spot demand alone. Futures Open Interest (OI) grew 8.04% to $27.12 billion within 24 hours. Despite that, BTC retraced to below $82,000 at press time. This rise suggests traders are opening new positions to capture further gains, adding momentum to the recovery. However, as seen in prior rallies in August and September, these large increases in OI were followed by sharp declines in price and multiple sell alerts. Increases in leverage therefore can provide significant impetus to an increase in price. However, they can also make a trader very susceptible to being forced into liquidation at a loss. Since Futures OI is trending back up after a fall-off in October. Sustained buying could support further gains.

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