Bitcoin (BTC) Price Rallies Amid Volatile Open Interest, Triggers Broader Market Recovery

Bitcoin (BTC) price printed another bullish streak, triggering a broader market recovery, which boosted select altcoins and Ethereum (ETH) price by a remarkable 8%

Bitcoin (BTC) price showed signs of fatigue on Friday after a massive rally over the past few days, while altcoins like Ethereum (ETH) price rose nearly 8% and XRP price declined 5% after a major run.

Bitcoin Price May Retest $60K Amid Open Interest Fatigue

Bitcoin price made a surprising move toward $62,000, continuing the uptrend from Monday's low at $49,000. A Matrixport report attributed the drastic rally to oversold conditions after BTC led cryptocurrencies to a colossal crash on Monday.

A previous Bitcoin price prediction anticipated that the release of US inflation data next week could provide momentum to continue the rally to $70,000. Another lower inflation print is expected to guide the Federal Reserve's decision on interest rates. A rate cut could propel BTC to achieve a new all-time high, targeting $80,000.

However, BTC has started to retreat from higher levels and may test $60,000 support. Should the correction extend below this level, it will confirm that traders are unwilling to take risks.

A 65% one-day drop in BTC open interest across three exchanges calls for caution when trading Bitcoin price this month. Historically, August is known for low volumes and liquidity, which may impact price increases.

Ethereum Price Rally Faces Bearish Flag, Key Support At $2,600

Ethereum price renewed its bid for the $3,000 target on Thursdays following a brief hiatus under $2,500. Traders aggressively bought the second-largest digital asset as a buy signal from the Moving Average Convergence Divergence (MACD) catalyzed the uptrend.

Bulls successfully challenged the hurdle at $2,700 but took a breather soon after, hinting at low liquidity or profit-taking among investors. Besides, the 50-day Exponential Moving Average (EMA) limits upside price movement above $2,700.

A bear flag pattern in the four-hour range could complicate matters for the bulls if validated, resulting in a potential 18% drop below the ascending channel's support.

The target equals half the distance of the flagpole and is extrapolated below the breakout point. Should this Ethereum price forecast materialize, a retest of the $2,000 level should be anticipated.

Holding firmly to higher support above $2,600 or the channel's middle boundary area will invalidate the bearish outlook, allowing bulls time to gather more liquidity for a major push to $3,000. The 20-day EMA is a level to watch since if declines intensify, it will provide ETH price support at $2,566.

XRP Price Rally Fizzles Out, OI Drops Massively

After Judge Analisa Torres put an end to the lengthy lawsuit against the Securities and Exchange Commission (SEC) on Wednesday, Ripple price rallied by more than 20%. Ripple was the obvious winner of the lawsuit as XRP was finally cleared of alleged security status. The company will, however, pay a $125 million fine.

The community celebrated XRP's "unconditional" win in the lawsuit, which lasted for nearly two years and had a significant impact on the cryptocurrency market. Many traders anticipated a bullish continuation for XRP after the verdict.

However, XRP price began to rally sharply on Wednesday itself, reaching levels above $0.62. This rapid ascent may have caused traders to book profits on Thursday, leading to a sell-off in the altcoin.

A 90% drop in open interest rates on major exchanges also contributed to the XRP price decline.OI rates usually fall when traders close their positions or derivative contracts, which can indicate a directional change in the underlying asset's price movement.

The massive open interest decline signaled a sell-off in XRP, which could explain the 5% price drop from Wednesday's highs.

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