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Cryptocurrency market analysis of open interest
I will add this indicator to my analysis from now on. It will give us a different perspective and help us broaden our market horizons. The reads here are exciting because they are unique
For example: Bitcoin bottomed on February 6, but OI (open interest) did not fall until ten days later, on February 16.
Then we saw this low reading in November 2021. OI was indeed high at Bitcoin’s historical peaks, but has since hit lows. The next significant drop in OI occurred on December 10th.
I would interpret this indicator to mean that regardless of direction, the market is either heating up or cooling down.
If open interest in a cryptocurrency is increasing, we know that the market is rising and some sudden moves could occur at any time. If cryptocurrency open interest is about to drop, we know something big is just over. For example, after the October 10 crash, the OI produced very low readings, again indicating that the market was cooling down and a major move had just ended. It took more than two weeks for the next shift to occur, and nearly a full month before the decline leveled off.
We won’t focus on any traditional interpretation of this indicator, but will make up for it based on price action and past history.
We study the past to see how Bitcoin performed when the indicator had a certain reading and use that to draw our conclusions.
Open Interest Cryptoanalysis
Health insurance is great, and now it’s starting to heat up. Cooling occurs after a major accident. Heating is underpinning the economic recovery and rising tide.
In fact, the current increase in interest rates supports further gains in the Bitcoin and altcoin markets.
thank you for reading
