Binance, a prominent cryptocurrency exchange, has experienced a notable increase in the number of open contracts for Bitcoin Futures, just ahead of significant upcoming U.S. economic indicators and cryptocurrency-related events.
On the 23rd of September, the exchange witnessed a nearly 7% rise in Open Interest (OI), propelling BTC Futures from approximately 85K coins to 90K as of the latest figures.
An interesting development to note is the upcoming release of former Binance CEO, Changpeng Zhao (CZ), from detention on the 29th of September.
This development appears to have fueled speculators, particularly those active on the Binance platform, to take on additional risks in betting on the future performance of BTC. They seem to be anticipating a potential surge in BTC prices, possibly in anticipation of the U.S. PCE Index (Price Consumption Expenditure) data release.
Rise in Speculative Interest in Bitcoin
The market experts are eagerly awaiting the PCE data as it could provide insights into the future trajectory of the Federal Reserve’s interest rate adjustments. This data release could potentially impact BTC’s price movements.
Some analysts perceive this upcoming event as a catalyst for heightened volatility in Bitcoin’s price. Consequently, the period between the 27th and 29th of September might witness significant fluctuations in the value of the leading cryptocurrency.
The substantial increase in Open Interest signals a growing interest in the market and reflects the optimism of Futures market speculators. However, this heightened interest also exposes speculators to the risk of substantial liquidations, which could further intensify BTC’s price volatility.
According to Coinglass’s data on liquidations over a week, critical price levels to monitor are at $62K and $65K, with mounting short positions around $65K, and notable long positions near $62K (as indicated by the bright orange color).
A swift surge above $65K could trigger the liquidation of numerous short positions, leaving bears vulnerable to significant losses. Conversely, a sudden drop towards the $62.2K range could result in over $800 million worth of long positions getting liquidated.
Bitcoin’s Price Movements
Bitcoin’s value has been hovering below the $64,000 mark, struggling to breach the crucial 200-day Moving Average (MA) that currently sits at $63.9K.
According to trader Daan Crypto, a decisive move above this level along with a break in the prevailing channel could signal a shift in market structure towards a bullish trend, potentially propelling BTC towards its All-Time High (ATH).
However, such an upward surge could trigger a short squeeze and expose bearish traders to significant losses. The market awaits whether these developments will be sufficient to propel BTC past the critical resistance level at $65K.