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The recent surge in Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="null" target="null" text="null" title="null">BTC</a>) open futures contracts has analysts concerned that the market might be showing signs of frothiness.
“BTC open interest (OI) has surged, exceeding $35 billion, a level that has historically correlated with local price peaks,” Bitfinex analysts declared in an Oct. 1 <a data-ct-non-breakable="null" href="https://blog.bitfinex.com/wp-content/uploads/2024/09/Bitfinex-Alpha-124.pdf" rel="null" target="null" text="null" title="null">report</a>.
<figure>
 <img alt="Bitcoin open interest surge past $35B raises ‘overheating’ concerns" name="" src="https://s3.cointelegraph.com/uploads/2024-10/01924d97-d8db-7852-ae8f-2004beb8d652">
 <figcaption style="text-align: center;">
 Bitcoin OI has fallen approximately 9% since crossing the $35 billion mark. Source: CoinGlass
 </figcaption>
</figure>
Bitcoin OI — the total number of Bitcoin futures contracts that have yet to be settled or expire — is a critical metric investors use to assess market <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-price-indicators-improving-could-see-short-squeeze-analyst" rel="null" target="null" text="null" title="null">sentiment and anticipate future price movements</a>.
On Sept. 27, Bitcoin OI reached $35.52 billion, the highest since June 7 when it clocked $37.69 billion, according to CoinGlass <a data-ct-non-breakable="null" href="https://www.coinglass.com/pro/dashboard/bitcoin" rel="null" target="null" text="null" title="null">data</a>. At that time, Bitcoin was trading near its all-time high, at $70,759, before pulling back nearly 18% over the next 30 days to $58,239.
The analysts argue that this “raises concerns of potential market overheating.”
Since Sept. 27, Bitcoin’s open interest has dropped about 9% to $32.32 billion, and the BTC price has also fallen toward $60,000 amid escalating tensions in the Middle East.&nbsp;
At the time of publication, Bitcoin is trading at $61,629, down 4.36% over the past seven days, according to TradingView <a data-ct-non-breakable="null" href="https://www.tradingview.com/symbols/BTCUSD/" rel="null" target="null" text="null" title="null">data</a>.
<figure>
 <img alt="Bitcoin open interest surge past $35B raises ‘overheating’ concerns" name="" src="https://s3.cointelegraph.com/uploads/2024-10/01924d9b-1ecc-7a1c-bce9-9f53f7aa6e2f">
 <figcaption style="text-align: center;">
 Bitcoin retraced back down toward $60,000 after recently regaining the $65,000 price level. Source: TradingView
 </figcaption>
</figure>
The pullback is within a range that Bitfinex analysts believe won’t derail the bullish momentum.
“A modest 5-10 percent pullback could reset OI without disrupting the overall uptrend,” they opined.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-safe-haven-status-questioned-amid-middle-east-conflict" rel="null" target="null" text="null" title="null">Bitcoin tanks, gold rebounds as Israel vows Iran ‘will pay’ for attack</a>
Meanwhile, Cointelegraph recently reported that some traders <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-traders-54k-btc-price-lower-middle-east-tensions#:~:text=BTC%20price%20expectations%20get%20flipped,rocks%20Bitcoin%20and%20risk%20assets.&amp;text=faces%20a%20trip%20to%20%2454,000,toll%20on%20BTC%20price%20strength." rel="" target="_self" text="null" title="https://cointelegraph.com/news/bitcoin-traders-54k-btc-price-lower-middle-east-tensions#:~:text=BTC%20price%20expectations%20get%20flipped,rocks%20Bitcoin%20and%20risk%20assets.&amp;text=faces%20a%20trip%20to%20$54,000,toll%20on%20BTC%20price%20strength.">say that the worst is yet to come</a> following <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-etfs-largest-outflow-in-nearly-month-iran-israel-conflict" rel="" target="_self" text="null" title="https://cointelegraph.com/news/bitcoin-etfs-largest-outflow-in-nearly-month-iran-israel-conflict">escalating tensions in the Middle East</a>. 
In its latest bulletin to Telegram channel subscribers, trading firm QCP Capital noted that crypto was “hit much harder” than oil and equities.
“We seem to have found some support at the 60k level, but further escalation could push us much lower, possibly to the 55k level,” it forecast.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/hamster-kombat-tap-to-earn-games-axie-pals-web3-gamer/" rel="null" target="null" text="null" title="null">Hamster Kombat tappers evolve with Swipe-to-Earn + Axie Pals Tamagotchis: Web3 Gamer</a>
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin open interest surge past $35B raises ‘overheating’ concerns

Cointelegraph

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