Cryptocurrency markets look blood red due to the collapse led by Bitcoin (BTC) in recent weeks. According to some analysis, we may have come to the end of this decline led by BTC. A metric that these analyzes claim is based on, and its analysis is at Kriptokoin.com .
Are we near the end of the decline in Bitcoin (BTC)?
According to this metric, Bitcoin may be close to reaching the bottom of its continued collapse. IntoTheBlock, known for its analysis of the cryptocurrency markets, suggested in a recent tweet that a possible “Bitcoin short squeeze” system may be in operation. The company’s analysis is based on the ratio of BTC’s “open interest” to the market cap of the flagship cryptocurrency. “Open interest” is the total number of futures contracts held by market participants at the end of the trading day. Analysis claims that Bitcoin’s open interest has recently reached a one-year peak of roughly 2.25%.
According to data provided by Coinglass, Bitcoin futures, which represent all outstanding contracts held by traders, were recently traded at 16.68 percent with crypto giant Binance accounting for 28.86% of the total. billion dollars reached a new record level. IntoTheBlock reminds us that the OI/MC ratio has also increased on the background of the falling BTC prices in July 2021, when Bitcoin dropped to $29,400 before continuing the upward trend. Therefore, the analytics firm expects a similar scenario to happen this time around.
BTC red for the third consecutive month with its price down 10% in July is on its way to save. On January 7, the relative strength index (RSI) on Bitcoin’s daily chart fell below 30 for the first time since May 17, indicating that the largest cryptocurrency has been oversold. On January 8, a widely watched Bitcoin “fear and greed” index dropped to 10.