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Is Bitcoin Price Going to Crash Again?

Bitcoin recently surged to $67,922, but technical and onchain factors suggest a price correction could be looming. A failure to hold above $68,000 may signal a reversal.

• Main Points:

  • BTC struggles at $68K: Bitcoin has failed to decisively break above the key $68,000 resistance level, raising concerns about a possible downturn.

  • Investors in profit: Over 91.5% of Bitcoin holders are now in profit, which may trigger a sell-off as they look to secure gains.

  • Record high futures open interest: Bitcoin futures open interest has hit an all-time high, increasing the likelihood of a price pullback.

  • Resistance and liquidation risks: If Bitcoin fails to turn $68,000 into support, it could face a sharp correction toward $61,000.

• Detailed Insights:

  • Resistance at $68,000: Bitcoin’s recent rally to $67,922 has met significant resistance at $68,000, a level it failed to break in July, leading to a 27% decline. With the current price nearing this level again, bears may aggressively defend the resistance, making a breakout crucial for sustained bullish momentum.

  • Profit-taking risk: With 91.5% of Bitcoin holders now in profit, according to onchain data from Into The Cryptoverse, the market could be overheating. Historically, when such a high percentage of holders are in profit, it often leads to sell-offs as investors look to lock in gains, potentially driving the price lower.

  • Rising futures open interest: Bitcoin futures open interest has surged to $38.4 billion, signaling strong demand for leveraged trading. However, this level of open interest could result in liquidation-driven volatility if Bitcoin faces another rejection at $68,000, similar to what occurred in September.

  • Potential downside: If Bitcoin fails to close above the critical $68,000 resistance level, analysts warn of a possible correction to $61,000. CoinGlass data shows a wall of sell orders above $68,000, further highlighting the importance of this level for the current rally.

Related: Is Bitcoin’s ‘Uptober’ Beginning or Will Today’s Rally Fizzle Out?

While Bitcoin’s recent rally is encouraging, caution is warranted as technical resistance and profit-taking could lead to a pullback if bulls fail to break through the $68,000 barrier.

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Bitcoin Open Interest Soars to 1-Year High as BTC Price Nears $68K

Bitcoin’s futures open interest surged to $38 billion as BTC’s price rallied 8% between Oct. 14 and 15. Although leverage demand has increased, traders appear cautious, reducing the likelihood of extreme price swings.

• Main Points:

  • BTC futures open interest hits $38B: Open interest reached its highest level since January 2023, signaling increased demand for leveraged Bitcoin positions.

  • Volatility concerns: High open interest raises the risk of cascading liquidations, but restrained leverage use suggests traders are managing their positions carefully.

  • ETF inflows boost sentiment: Bitcoin ETFs saw $810 million in inflows, further fueling bullish market sentiment.

  • Balanced market: Despite the rise in leverage, the market structure remains balanced between bulls and bears.

• Detailed Insights:

  • Surge in futures demand: Bitcoin’s price gained 8% in two days, significantly outperforming the S&P 500. As a result, Bitcoin futures open interest reached 566,270 contracts, or $38 billion, just below its all-time high in March 2024. This sharp increase in leverage demand reflects growing investor confidence following strong price action.

  • Institutional interest grows: Between Oct. 11 and 14, US-listed Bitcoin spot ETFs saw $810 million in net inflows, signaling increased institutional demand. This boosted bullish sentiment, encouraging traders to increase their positions in Bitcoin futures.

  • Leverage and premium data: While the Bitcoin futures premium spiked to 10% on Oct. 15, it remained within a balanced range, showing that both bulls and bears are active. This balanced market structure helps limit the risk of a dramatic price crash.

  • Risk of liquidations low: Despite high open interest, only $70 million in Bitcoin futures positions were liquidated as the price fluctuated by 8.6%. This suggests that traders are using leverage carefully, reducing the chance of cascading liquidations in the short term.

Related: BlackRock’s Fink: Bitcoin Is an Asset Class, Like Gold

Increased futures demand has led to heightened leverage in Bitcoin markets, but cautious positioning by traders suggests that extreme volatility is unlikely in the near future.

Ethereum Price Shows Strength, but a 23% Drop in DApp Activity Raises Concern

Despite a 9.4% price rally, Ethereum’s DApp activity has declined 23%, and the lack of demand for Ether ETFs may limit the recent price gains. Investors are watching for signs of a potential price pullback.

• Main Points:

  • ETH price rally: Ethereum surged to $2,687 but remains down 25% over the last three months.

  • Declining DApp volumes: Onchain DApp volumes on Ethereum fell by 23% in the past week, sparking concerns about price sustainability.

  • Stagnant TVL: Ethereum’s total value locked (TVL) remains stable at 19 million ETH, despite a dip in network activity.

  • Lack of ETH ETF demand: Spot Ether ETFs saw net outflows of $6 million in October, contrasting with Bitcoin ETFs, which attracted $810 million.

• Detailed Insights:

  • Price surge but declining activity: Ethereum’s recent 9.4% price increase to $2,687 is overshadowed by a 23% drop in DApp activity. Major DApps like Uniswap and Balancer saw significant declines in onchain volume, contributing to concerns that Ethereum’s rally may not be sustainable in the long term.

  • TVL remains stable: Ethereum’s TVL has hovered around 19 million ETH for the past two months, maintaining a 55% market share in the cryptocurrency sector. However, the flat growth in TVL reflects a lack of momentum compared to its competitors.

  • ETF struggles: While Bitcoin ETFs saw substantial inflows, Ether ETFs experienced $6 million in outflows in October, indicating a lack of institutional interest. This disparity raises concerns about Ethereum’s current investment appeal, especially as Bitcoin continues to outperform.

  • Layer-2 solutions and supply burn: Ethereum’s shift toward lower-fee layer-2 solutions has reduced its supply burn rate, further dampening investor optimism. As Ethereum scales to improve transaction efficiency, it may take time for these upgrades to positively impact ETH’s price.

Related: Why Is Dogecoin Price Up Today?

Ethereum’s recent rally shows strength, but declining DApp activity and weak demand for ETH ETFs could put pressure on its price in the near term.

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This article is not financial advice. Market conditions can change rapidly, and past performance does not guarantee future results