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Open Interest variation nears Extreme Greed region
ROC Open Interest only 12 points from the Extreme Greed range, which suggests caution in the short term due to the pulsating euphoric sentiment. This range hasn't been tested by the market since April 2021 when Bitcoin rallied around +100% and reached $30,000. With the Open Interest in an uptrend, its variation tends to remain high in the upper region, indicating most of the time the prevailing sentiment of euphoria, greed and irrationality. During a euphoric market, the risk of holding long positions increases, as people are buying here speculating on continued appreciation in the short term. In terms of cycles, it is still too early to say that there is a great deal of Euphoria infecting the market, given the history of sentiment based on this indicator alone. However, during an upward price rally there are always strong corrections, leading the indicator to move away from the upper zone. Therefore, the formation of a new peak of euphoria may be taking place and this brings future opportunities that can be taken advantage of.