Bitcoin could be close to reaching the bottom of the ongoing correction, according to this metric
In a recent tweet, cryptocurrency-focused analyst firm IntoTheBlock noted that a potential Bitcoin cut could be in the works.
Its analysis is based on the ratio of Bitcoin’s open interest relative to the flagship cryptocurrency’s market cap, which recently hit a one-year peak of roughly 2.25%.
According to data provided by Coinglass, open interest on Bitcoin futures, which represents all open contracts held by traders, recently hit a new high of $ 16.68 billion, with crypto giant Binance accounting for. 28.86% of the sum. FTX and CME Group come in second and third place (17.65% and 14.06%, respectively).
IntoTheBlock recalls that the OI/MC ratio also increased against the backdrop of falling Bitcoin prices in July 2021, the month Bitcoin plunged to $29,400 before resuming its uptrend.
Therefore, the analytics company expects a similar scenario to unfold this time around.
Bitcoin is now on track to record its third consecutive month in the red, with its price falling 10% in July. It is currently changing hands at $41,502 on major exchanges.
Extreme fear and oversold conditions
On January 7, the Relative Strength Index (RSI) on Bitcoin’s daily chart fell below 30 for the first time since May 17, indicating that the largest cryptocurrency is oversold.
On Jan. 8, a widely-tracked Bitcoin “fear and greed” index dropped to 10.
The bulls may not have come out of the woods yet. As reported by U.Today, Galaxy Digital CEO Mike Novogratz recently predicted that the price of the largest cryptocurrency could end up reaching $ 38,000, which is the lower range of an area of major support.
