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The risk of falls for altcoins increases.
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In general, bullish expectations for Bitcoin remain.
Bitcoin (BTC) surpassed the $100,000 barrier for the first time in its history and is now walking through completely unexplored and unknown territory.
For this reason, it is worth asking the following question: Is it possible that the price remains in six figures?
Analyst Omkar Godbole think that the activity of market makers can guarantee that the price of bitcoin remains above the $100,000.
Before continuing, it is important to clarify that market makers are entities or Cryptocurrency exchanges that provide liquidity, through the purchase and sale of assets. Its function is to ensure that always There are buyers and sellers so that investors can carry out their transactions immediately.
Currently, the price rebound has driven growing demand for leveraged positionsallowing traders to make higher profits. However, also significantly raises the risk of massive lossesif the price were to experience a strong correction.
This is where the role of market makers becomes crucial. When demand for long positions grows at this rate, they act by buying or selling assets to maintain market flow. Thus, they help prevent excessive price fluctuations, which could destabilize BTC.
To put it in other terms, if the demand for BTC continues to rise and liquidity remains, the price will remain above $100,000 in the long term.
A key factor in this context could be Microsoft shareholder vote on whether the company should conduct a formal BTC investment evaluation. This vote will take place on December 10. Although it is the previous step to the direct purchase of the asset, it would mean a true catalyst for the demand for the asset.
However, all this could generate a bearish effect on the rest of the cryptocurrencies (thus reducing the intensity of the altseason), because much of the attention and liquidity will be placed on the price of the cryptocurrency. coin created by Satoshi Nakamoto.
Increase the financing rate
Another issue to highlight is that BTC annual funding rate increased by almost 100%, showing strong investor interest in taking long positions (upward price bet). This indicates that there is a bullish expectation regarding the price of the digital currency.
When traders are in long positions, they have to pay an interest rate to those in short positions (downside price bet), or vice versa, to maintain some balance in the market.
This is a sign that the market is overheated, which means that several investors are taking long positions, waiting for the price of BTC to rise further.
Below is a heat map with funding rates for BTC and other cryptocurrencies on the market. Warm colors (yellow, orange and red) indicate a positive interest rate (close to 200%) for long positions.
In the particular case of BTC, the color went from green to orange, which represents that almost 100% increase in the annual interest rate.
BTC funding rate increased by almost 100%. Source: Velo Data.
In this regard, Griffin Ardern, research director at the BloFin cryptocurrency financial platform, believes that the options market can provide a form of protection for traders, in the event of a price crash. Although he clarifies: “This support from the options market can offset the impact of the liquidation of leveraged positions to a certain extent.”
As CriptoNoticias has explained, the options are contracts that give investors the right (but not the obligation) to buy or sell an asset at a certain price in the future.
That is, traders can use options as a way to protect yourself from potential losses.
Bullish outlook for BTC
After BTC broke the $100,000 barrier, open interest (OI) for the asset set a record, surpassing $65 billion for the first time in its history.
This is an important metric for traders because it provides information about market sentiment, trading activity and liquidity. It also reflects the current number of market transactions in circulation.
This indicator increases when the number of new contracts, in long or short positions, exceeds the number of closed contracts. If open interest grows, it is a sign that there is an increase in liquidity and trading volume.
According to data from the Coinglass explorerthe Chicago Mercantile Exchange (CME) handles the majority of open interest in BTC contracts at 30.6%. One step below are the cryptocurrency exchanges Binance (20.6%) and then Bybit (13.6%).
Exchanges with most open interest (OI) in BTC. Source: Coinglass.
In conclusion, it is important to note that every time the OI rises, it awakens bullish sentiment among investors.
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