When the price reached nearly $87,500, the market experienced a powerful Bitcoin rally. Market data shows that this price surge is largely explained by leverage when open interest (OI) reaches an all-time high of over $32 billion. A significant increase signals aggressive trading activity, but also poses the risk of long-term liquidation flows that cause major market prices fluctuations.
BTC Market Alert: Leveraged Driven Pump
“Open Interest (OI) has reached record levels above $32 billion due to the BTC price close to 87.5k.
But here’s the catch: high OI + rapid price rise = risk of liquidation cascades! ” – @it_tech_pl
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– cryptoquant.com (@cryptoquant_com) March 24, 2025
FOMO or Fallout? Two possible scenarios
With an enormous amount of leverage, Bitcoin is a turning point in market conditions. BTC is at risk of missing out on this parabolic market move (FOMO) and therefore risks entering a new, unexplored price area. Both institutional traders and retailers join the upward trend, followed by additional acceleration in price movements.
However, leverage-driven gatherings are vulnerable. The bull’s lack of control over the market can lead to widespread forced liquidation for long over-covered positions. Price reductions at this point create a chain reaction that eliminates trading operations before they lead to rapid market sales. As the Bitcoin market recently recorded significant revisions due to the liquidation chain reaction, just like its previous bull market cycle, this emerging trend represents a key moment in the future price direction of BTC.
Key indicators for monitoring Bitcoin prices
In unstable markets, traders need to inspect changes in price and changes in open interest (OI) to establish successful navigation. Unmanaged growth in OI puts Bitcoin at risk of a downward price movement, as there is no clear purchasing pressure from the spot market. The rise in prices that maintain higher purchase demand will allow the rally to continue.
The financing rate of permanent futures contracts serves as a market sentiment indicator. High funding rates indicate excessive and prolonged leverage before the market experiences pullback. Abrupt reductions in OI seem to minimize risk by causing minimal price movements and by reducing leverage, leading to market stabilization.
What’s ahead?
The question here is whether Bitcoin can successfully push $90,000 by breaking a higher value, or will it face a major rejection during this important point?
Bitcoin’s current price position has become extremely important for its ability to succeed or fail. Bitcoin is approaching an important decision point that determines whether it will advance beyond $90,000 or enter the downward trend caused by liquidation. Traders should expect extreme market volatility in the coming days as leveraged positions are at the best.
