BTC Price Drops Below $52,000 as Bitcoin Futures OI Reached a 26-Month High

Bitcoin (BTC) fell below the $52,000 mark on Feb. 20, but a number of technical and on-chain indicators show that its upside is still strong.

Bitcoin TVL reaches an all-time high

Data from DefiLlama shows Bitcoin's total value locked (TVL) increased to $1.66 billion on Feb. 20. This is the highest level the TVL on the pioneer blockchain has reached.

The chart below shows that Bitcoin's TVL has increased by 2511% over the last three months from $271 million in November 2023.

This increase in TVL has moved in tandem with BTC's price which is up more than 45% over the same period.

On the shorter timeframe, Bitcoin's TVL has increased by over 483% over the last 30 days, beating top DeFi protocols such as Ethereum, BNB Chain and Solan, which have seen 30%, 19% and 40% increases respectively.

Top blockchains: percentage change in TVL. Source: DefiLlama

The rising TVL reflects traders' interest in Bitcoin's layer 2 scaling solutions and shows the blockchain continuing to attract new users because of its lower traction costs and stability.

Bitcoin's futures OI surpasses 2-year high

Meanwhile, burgeoning open interest (OI) on C Bitcoin futures markets hitting a record $23.96 billion was indicative of volatility to come, according to data from monitoring resource CoinGlass.

Bitcoin futures open interest. Source: CoinGlass

Popular trader Daan Crypto Trades provided a more in-depth analysis of open interest, noting a divergence when this was denominated in BTC.

In a Feb. 18 post on X Daan said,

"This +100% rally from October has been healthy in terms of leverage imo."

BTC's bull flag project's an upswing to $65,000

After reaching a two-year high of $52,884 on Feb. 15, BTC price pulled back as sellers booked profits and the wider crypto market corrected.

Despite the correction, a bull flag can be seen on the daily chart, which hints at the continuation of the uptrend.

BTC bulls face resistance from the flag's upper boundary at $52,000. A daily candlestick close above this level would signal a possible breakout from the chart formation, projecting an uptick to $65,000. Such a move would represent a 25% ascent from the current price.

BTC/USD daily chart. Source: TradingView

The 50-day exponential moving average (EMA), 100-day EMA, and 200-day EMA were all facing upward, suggesting that the market conditions still favored the upside. In addition, the SupertTrend indicator had reversed from red to green and moved below the price. This happened on Feb. 8, signaling the start of a sustained uptrend.

On the other hand, the bears may pull the price lower with the flag's lower limit at $50,900, providing the first line of defense. Additional support lines could emerge from the major support level at $50,000 and the 50-day EMA at $47,640.