This summary text is fully AI-generated and may therefore contain errors or be incomplete.
Bitcoin could potentially experience a significant decline in the near future, based on historical patterns. The aggregated open interest of all cryptocurrencies, excluding Bitcoin, is forming a bearish pattern. Open interest refers to the total value of derivative positions currently open on exchanges worldwide. When this metric is high for a particular cryptocurrency, it indicates a large number of positions in the derivative market, which often leads to price volatility. Conversely, low values suggest a period of relative price stability. In this case, the focus is on the aggregated open interest of altcoins. Analysis shows that whenever this indicator surpasses $12.2 billion, Bitcoin’s price tends to reach a top and subsequently decline by at least 20%. This pattern has been observed during the tops of Bitcoin’s price in February, April, and July of this year. Currently, the aggregated open interest has crossed the $12.2 billion mark and reached $13.8 billion, indicating an overheated derivative market. This suggests that Bitcoin may be approaching a top, given the overheated altcoin open interest. Additionally, the dominance of futures open interest by assets other than Bitcoin and Ethereum has also reached its highest level since 2023, further highlighting the overheated state of the market. As a result, the market’s current condition could pose risks not only for Bitcoin but also for the entire cryptocurrency sector.