Bitcoin due for squeeze as record $88B open interest sparks ‘flush’ worries
Key points:
Bitcoin circles the $120,000 mark as traders boost liquidity on either side of the spot price.
Analysis sees bulls addressing the “imbalance” to take the market higher.
Long-term bearish divergences continue to cast doubt on the future of the Bitcoin bull market.
Bitcoin 
BTCUSD consolidated $120,000 support at Friday’s Wall Street open as analysis prepared for a fresh short squeeze.
Trader eyes $123,000 BTC liquidity
Data from Cointelegraph Markets Pro and TradingView showed a cooling of short-term BTC price volatility on the day.
BTCUSD had hit new local highs into the daily close, with the level to beat now at $121,100.
Commenting on the current market set-up, popular trader CrypNuevo eyed overhead ask liquidity as a likely target next.
“Liquidations at $120k have been hit,” he summarized in part of his latest analysis on X.
Data from CoinGlass additionally showed bids massing around $118,500, representing potential support in the event of a market correction.
On the topic of a potential retracement, popular trader BitBull suggested that this could come thanks to a surge in open interest (OI) on derivatives markets.
“In the next 1-2 weeks, BTC and alts will have a big leverage flush,” he predicted in part of an X post.
CoinGlass data put total futures OI across exchanges at a record $88.7 billion on the day.
Bearish divergences cause concern
A further argument for trouble down the line came from fellow trader Roman, who eyed bearish relative strength index (RSI) divergences on daily and weekly timeframes.
A bearish divergence occurs when RSI hits lower highs as price hits higher highs — something playing out around Bitcoin’s current $124,500 record.
“I wonder how long $BTC can ignore these bear divergences and lack of momentum on the 1W and 1M,” Roman queried Tuesday.
As Cointelegraph reported, four-hour RSI continues to sit in “overbought” territory, reinforcing expectations of low-timeframe price cooling.
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.