Bitcoin is on the brink of forming a new record high above $67,000 on Monday having enjoyed a significant breakout just minutes before the weekly candle close.
The world’s largest cryptocurrency is now trading at $65,600 as it looks to establish a level of support above the prior all-time high of $65,000.
Open interest rose by more than $2.6 billion during the recent move to the upside, indicating a sign of confidence as traders take on more leverage.
This does, however, come with its own complications as, when open interest reaches a certain point, it means the market is ripe for a “long squeeze”.
BTCUSD chart by TradingView and Coinalyze
A long squeeze is initiated when price action moves rapidly to the downside, forcing traders to close leveraged long positions, thus causing a cascade of sell pressure.
Trade volume is also intriguingly lower than when Bitcoin first tested these levels back in April, with $35 billion being traded over the past 24-hours compared to $88 billion during its peak in April.
If Bitcoin can begin to move up to the $70,000 mark on convincing volume, the over-leveraged long positions would have a safety buffer that could well prolong the move to the upside, although many traders will begin to become cautious before engaging in a “risk-off” approach.
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In August 2008, the domain name bitcoin.org was registered. On 31st October 2008, a paper was published called “Bitcoin: A Peer-to-Peer Electronic Cash System”. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.
The paper outlined a method of using a P2P network for electronic transactions without “relying on trust”. On January 3 2009, the Bitcoin network came into existence. Nakamoto mined block number “0” (or the “genesis block”), which had a reward of 50 Bitcoins.
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As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.
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