After hitting a new all-time high (ATH) of $124,474 on Binance on August 13, Bitcoin (BTC) has tumbled toward $113,000, with the next major support zone around $110,000. Analysts warn that more downside could still be ahead for the top cryptocurrency.
According to a CryptoQuant Quicktake post by contributor XWIN Research Japan, Bitcoin open interest across all exchanges has surged past $40 billion, nearing ATH territory. This rise shows both whales and short-term traders are piling into leveraged positions.
The chart below highlights the recent spike in BTC open interest, now hovering at $40.6 billion. Compared to August 2024 levels of $15 billion, open interest has grown by more than 150%.
The CryptoQuant contributor added that despite this surge, the funding rate has remained positive, showing a strong long bias. While this reflects market optimism, it also signals a crowded trade, with most participants betting on further BTC appreciation.
As a result, the risk of a long squeeze – forced liquidations of long positions due to aggressive leverage – has risen. XWIN Research Japan explained in their analysis:
A sudden price drop can trigger a cascade of forced selling, amplifying volatility. In other words, Bitcoin’s short-term moves remain at the mercy of speculative flows.
Despite speculative froth from excessive leverage in the market, BTC fund holdings by Bitcoin exchange-traded funds (ETFs) and institutional investors continue to surge, exceeding 1.3 million according to latest data.
