Bitcoin: Analytics Company Issues Warning About Hot Market

According to an analysis company, the recent volatility in the crypto market indicates that Bitcoin (BTC) is at risk of further depreciation. According to research company K33, the increase in leveraged positions and strong capital inflows into Ethereum could put pressure on this leading cryptocurrency in the short term. The chairman of K33 Research, Vetle Lunde, stated in a report that the open interest of Bitcoin futures contracts (OI) has reached a two-year high. According to data, the total open interest of Bitcoin futures contracts (OI) has exceeded 310,000 BTC (34 billion dollars). Over the past two months, the contract volume has increased by 41,600 BTC, with an increase of 13,472 BTC just last week. Lunde noted that active long positions have increased in the market as funding rates rose from 3% to 11% annually, and this is similar to the increase in leverage seen in the summer of 2023 and 2024. Recalling that both periods led to a strong wave of liquidations in August, the analyst stated that this consolidation process could last longer. Lunde warned: "The risk of a buying squeeze is quite high in the short term. A cautious stance would be more reasonable until the excessive leverage is removed." However, Lunde noted that although the price of Ethereum in dollars has reached a record high, its long-term trend compared to BTC remains weak. The ETH/BTC yields for 1, 2, and 3 years are still negative. In previous cycles, the record high of Ethereum often coincided with the peaks of the crypto market in general. In 2017 and 2021, the surge of ETH, combined with the altcoin boom and the stagnation of BTC, signaled market highs. However, this time, the dominance rate of BTC reached 58.6%, a stronger position compared to the below 40% level in previous cycles.