Bitcoin Weekly Update: Open Interest Reflects $69K BTC Price

Bitcoin has reached a fresh two-year record for the weekly close, starting the last full week of February above $52,000. The strong performance of BTC price indicates that bulls are driving the market closer to all-time highs. Traders and market observers have mixed opinions on the timing, but consensus is increasingly calling for further upside. Bitcoin has successfully managed the turbulence of major events this year, and with the block subsidy halving approaching in two months, there are hopes for a rally. The picture in the long term is less predictable, with some analysis warning that BTC/USD may reach its peak in 2024 before entering a bear market.

The impact of the halving on price is a topic of contention, and there is ongoing debate about whether the four-year cycle revolving around halving events is still valid. Some argue that shifts in price at unusual times suggest a challenge to the traditional cycles. Others believe that the current cycles are “business as usual” and that a cycle top may come months after the halving. Despite the uncertainty, there is still potential for gains before the halving in April, according to analysts.

On a macro level, global liquidity conditions are better than ever, which could act as a catalyst for cryptocurrencies. In the United States, there are concerns that rising inflation could lead to a more hawkish stance at the Federal Reserve. This week will see important economic data releases and speeches from Fed officials that could impact market sentiment.

Bitcoin open interest has reached a 26-month high, indicating increased interest from investors. Analysts warn that fresh positioning at this point carries a high level of risk. While there is potential for the price to rise, the risk-reward ratio is not favorable. Funding rates and leverage remain at manageable levels, suggesting that traders are not exhibiting “irrational exuberance.”

Cross-crypto sentiment is showing signs of extreme greed, with the Crypto Fear & Greed Index reaching its highest level since the 2021 Bitcoin all-time high. Historically, such high levels of greed have preceded long-term market corrections. It is worth noting that Bitcoin has doubled in value in a few months without a major correction.

Bitcoin’s price action in the coming days and weeks remains uncertain. While there are indications of further upside, there are also risks and uncertainties that could impact the market. Traders and market observers will continue to closely monitor various factors, such as the halving, macroeconomic conditions, and market sentiment, to gauge the direction of BTC price.