Bitcoins open interest (OI) on Binance has climbed to approximately $13.7 billion, and is nearing the mid-to-late July highs.

Such a reading points to increased speculative activity in the market.

All-Time High Open Interest

The latest data shared by CryptoQuant shows that the rise in OI is occurring alongside a price rebound, which indicates the entry of new, likely long, positions rather than just the unwinding of previous shorts. The analyst noted that when OI rises faster than price, the market becomes more leveraged, thereby increasing the risk of a long squeeze if prices turn lower.

The $119,000-$120,000 range has emerged as a critical decision zone which had acted as resistance in July. A breakout above this level with high OI could push prices toward $122,000-$124,000, but the move would be fragile and vulnerable to sharp reversals.

On the other hand, a rejection at this level could trigger a wave of liquidations toward nearby support. The recent trajectory marks a rebound in both OI and price after declines in late July and early August, when money appeared to be exiting the market.

With OI hovering a little below its ~$14 billion peak, there is limited room for further leverage expansion before the risk of a wipeout grows. A daily close above $120,000 with stable or slightly declining OI would suggest the upside is being fueled by spot buying or short covering. Both of these factors are seen as healthier drivers that reduce liquidation risk.

For traders, the focus now is on whether Bitcoin can hold above $120,000 without another surge in speculative positioning. Stability at that level could confirm a breakout, while a rapid rejection with high OI would raise the odds of a liquidation-driven pullback.

Liquidity Trends

Swissblock recently stated that the liquidity trend is yet another factor that could dictate the next move. Network growth is high at 82, while liquidity sits mid-range at 52. The current figures could fuel further gains if strengthened. A drop below 40 with strong network growth could signal a late-stage top and potential pullback.

Surpassing all-time highs is just the first step; continuing price discovery will hinge on improved liquidity.