According to CryptoPotato, a CryptoQuant analyst has warned that Bitcoin (BTC) may be at risk of a significant price correction, despite the upcoming halving event. The analyst, known as Gaah, stated that the cryptocurrency market remains in a precarious position, particularly for leveraged traders. He suggested that substantial pressure could lead to a correction that would disrupt Bitcoin's current price structure.
At the time of the report, open interest for Bitcoin was in the middle range, indicating a neutral sentiment among investors towards new positions. However, the price of Bitcoin remains in the region of the last top-created positions in March. The open interest range is also volatile in the upper region, suggesting potential for more liquidations from leveraged traders seeking liquidity. Gaah warned that this region is risky for traders, and any significant pressure could lead to a correction that would alter the price structure, causing Bitcoin to drop before reaching a new all-time high.
Furthermore, the overall market sentiment is currently euphoric, as evidenced by the high funding rates in the Bitcoin futures market. This indicates a period of extreme greed and creates potential for a significant decline. Gaah's analysis comes as Bitcoin recovers from a drop over the past three weeks, where it fell from an all-time high of $73,700 on March 14 to less than $62,000. Earlier this week, the cryptocurrency rebounded to the $70,000 range, but has since dropped to $69,300.
CryptoQuant also revealed that high demand from large Bitcoin investors is expected to drive the asset's post-halving rally, as the effects of the quadrennial event have been diminishing.