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Bitcoin’s recent price action may be flashing caution signals, according to market analyst Daan Crypto Trades, who shared a comparative analysis of two key price zones using aggregated open interest (OI) data.
In the first highlighted section on the chart — the green zone — BTC saw a +42% price increase, accompanied by an increase of 30,000 BTC in open interest. Daan called this move “very clean and healthy,” noting that price and leverage rose in tandem, suggesting balanced participation from market participants.
Red Zone: Overheated Leverage, Weaker Price Follow-Through
In stark contrast, the red zone saw a much weaker +8% price increase, despite a larger OI build-up of 45,000 BTC — 50% more than in the green zone.
This imbalance indicates that excessive leverage entered the market during the all-time high sweep, with many of those long positions now likely trapped in the $108,000–$110,000 range.
“That’s a lot of leverage added into that move. I think much of it is still trapped,” Daan said.
What’s Next? Watch for an OI Flush
While rising open interest alongside price is common in bull trends, Daan warned that this recent push lacked sustainability, as it was driven by over-leveraged long positions rather than organic buying pressure.
He suggested that a “quick flush” of open interest — ideally back to the white dotted line seen on his chart — would represent a healthy reset. Such a move could clear out excess leverage and pave the way for a more sustainable uptrend in the short to mid-term.
Conclusion
The divergence in open interest behavior highlights the importance of monitoring market structure alongside price. While Bitcoin remains in a broader bullish trend, trapped longs and unstable leverage at recent highs may need to unwind before the next leg higher can begin.
The post Bitcoin Rally in Trouble? Analyst Warns of Trapped Longs at $110,000 appeared first on Coindoo.
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