Bitcoin’s price has bounced back by more than 7% in the past week after hitting a two-week low around $56,550, reaching approximately $71,560 on June 6. However, there are indications that a significant correction could be on the horizon based on various technical and on-chain factors.
The recent price recovery in Bitcoin has been driven by renewed inflows into spot Bitcoin exchange-traded funds (ETFs), which have exceeded $1.3 billion over the last two days.
All Long-Term Bitcoin Holders in Profit
Following Bitcoin’s recent surge above its November 2021 all-time high, all remaining long-term holders (LTHs) have turned their unrealized losses into profits.
According to a report from market intelligence firm Glassnode, only 0.3% of long-term holders, defined as those holding Bitcoin for more than 155 days, were still experiencing losses when the price was around $68,000 on June 4. Glassnode highlighted that the number of long-term holders at a loss was insignificant, and as long as Bitcoin holds above $69,000, all long-term holders will remain profitable.
As of the time of publication, Bitcoin was trading at $71,138, indicating that all long-term holders are now in profit. This situation often triggers fear of missing out (FOMO) among investors, which can lead to price corrections as investors start booking profits.
Rising Bitcoin Futures Open Interest Raises Concerns
In March, Bitcoin futures open interest surged to $36.31 billion, but the price failed to break the $72,000 resistance, resulting in a 22% correction over 25 days. Similarly, with the recent surge above $71,000, Bitcoin futures open interest has risen by 12% over the last week to reach an all-time high of $37.61 billion on June 6.
The substantial increase in Bitcoin futures open interest has raised concerns among investors, with some suggesting that it indicates excessive borrowing. High open interest levels can lead to increased price volatility, especially when traders hold multiple positions and decide to adjust their strategies suddenly.
Overall, the combination of factors such as FOMO among long-term holders and rising futures open interest suggests that Bitcoin may experience price pullbacks in the near future as traders take profits and adjust their positions.
Summary Review: While Bitcoin has experienced a notable recovery in price recently, there are indications suggesting a potential correction on the horizon. The fact that all long-term holders are now in profit, combined with the surge in Bitcoin futures open interest to record levels, raises concerns among investors. This situation could lead to increased price volatility and pullbacks in the coming days as traders adjust their strategies and book profits. As always, it’s essential for investors to stay informed and monitor market developments closely to navigate these fluctuations effectively.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
