Bitcoin has extended its upward momentum over the past week, gaining nearly 6% in that time and 1.8% in the past 24 hours. At the time of writing, BTC is trading at $120,499, maintaining its position near a key resistance zone between $119,000 and $120,000.
According to Arab Chain, a simultaneous rise in both price and open interest typically signals the entry of new speculative liquidity, most likely from traders taking long positions.
In this scenario, Arab Chain sees potential for BTC to target the $122,000–$124,000 range. However, a sharp rejection at these levels with elevated open interest could trigger liquidation-driven declines toward nearby support.
Open interest is currently just below the all-time high of approximately $14 billion, leaving limited room for further leveraged build-up before reaching historic extremes.
The analyst cautions that a significant jump in open interest without a corresponding price advance, or worse, with a price decline, would point to an overleveraged environment.
Conversely, price stability or gains above $120,000 while open interest holds steady or declines slightly would be a healthier sign, indicating the move is supported by actual buying rather than excessive leverage.
Traders are likely to focus on how BTC behaves around the $120,000 mark in the coming days, with open interest dynamics serving as a key signal for the next directional move.
Featured image created with DALL-E, Chart from TradingView
