Bitcoin price swings are likely to continue, an outcome that is reinforced by Bitcoin futures record high open interest.
) investors are always waiting for and excited by volatility but seldom enjoy it when a price pump is followed by a sharp correction that triggers forced liquidations in futures contracts and amplifies the downside price movement.
Volatility examples in Bitcoin include a 10% correction on March 19, reaching a low of $60,795, followed by a 12% gain on March 20. This unforeseen price swing resulted in $375 million of forced liquidations in BTC futures contracts over two days. While this movement may not directly impact holders, it certainly influences the trajectory of the bull run and, more significantly, Bitcoin's risk perception by the broader market.
Consequently, if Bitcoin's price was suppressed by investors using leveraged shorts, one should anticipate the movement to eventually reverse, leading to short-term buying pressure. This partly explains why high futures open interest is linked to increased volatility.X user Amit Kukreja, for instance, alleges that market makers have been pursuing leveraged longs and shorts.
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