Bitcoin surged to a new all-time high of $76,400 following the conclusion of the U.S. presidential election, with Donald Trump emerging as the clear victor. Historically, November and December have often marked bullish months for Bitcoin and the broader cryptocurrency market, and current market indicators suggest that the trend may continue.
While the current rally shows strong momentum, CryptoQuant founder Ki Young Ju has cautioned against expectations of a massive upswing. Instead, he suggested that Bitcoin’s price may see only modest gains of around 30%-40%, contrasting sharply with the 368% surge witnessed in previous cycles. Despite this conservative outlook, market sentiment remains robust, as evidenced by the recent surge in Futures Open Interest (OI).
Open Interest Surges, Signaling Bullish Sentiment
Bitcoin’s Open Interest in futures contracts has been steadily climbing for the past three years, reaching an all-time high of $45.8 billion in November 2024. The rally from October 2023 through March 2024 saw OI rise from $11.9 billion to $38 billion, underscoring an increased appetite among investors. This high level of Open Interest, combined with Bitcoin’s recent price peak, indicates a healthy bullish sentiment and suggests that Bitcoin may be entering a price discovery phase, which could lead to more volatility in the months ahead.
However, traders should remain cautious, as the price discovery phase is often accompanied by significant volatility. Market trends indicate that deep pullbacks may occur, and traders should prepare for potential price swings.
Short Sellers Add Pressure While Long Liquidations Loom
Despite Bitcoin’s bullish momentum, some short sellers continue to place leveraged bets against the rally. According to data from Coinglass, there is a high-leverage liquidation level cluster at $75,740 for short positions, while long liquidations are clustered around $73,205. This positioning suggests that any sharp downward move toward $70,000 could trigger liquidations, especially for overleveraged traders. On the other hand, a continuation of the uptrend might ease the pressure on long positions, potentially reinforcing bullish sentiment.
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On-chain metrics, such as the Net Unrealized Profit and Loss (NUPL) ratio, provide additional insights into Bitcoin’s current market cycle. The NUPL is currently at 0.559, a level previously seen in December 2016 and November 2020. Both periods marked the early stages of strong bull runs. Historically, the NUPL has peaked around 0.7 during past cycles, which signifies a substantial portion of investors being in profit and signals a cycle top. With the current reading far from this peak, Bitcoin’s bull run could still have considerable upside potential.
What Lies Ahead for Bitcoin?
While historical trends favor a bullish end to the year, Bitcoin’s next steps will depend on factors like Open Interest levels, liquidation maps, and on-chain metrics. With bullish indicators intact but not overheated, BTC may have room for further gains, albeit within Ju’s forecasted 30%-40% range. As the market moves through the price discovery phase, traders should stay alert to price volatility and potential pullbacks, ensuring they are positioned wisely for the journey ahead.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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