Signs of an Altcoin Correction Emerge, According to Bitfinex Insights

A leading crypto exchange’s research division is alerting traders to monitor open interest (OI) while dealing with altcoins.

According to Bitfinex’s latest Alpha report, a decline in OI has contributed to significant rallies for various altcoins, including SUI and AAVE.

The report suggests that an increasing risk appetite and easier movement of altcoins, thanks to the decrease in OI, have played a role in SUI and AAVE soaring by 100% since their lows in August and September.

However, there is a notable concern: OI has reached a new high of $11.48 billion, surpassing the previous peak of $10.74 billion on August 19. This increase occurs even as the OTHERS index—which tracks altcoins outside the top 10 by market cap—has failed to hit new highs.

With Bitcoin (BTC) at the forefront of a market-wide surge, Bitfinex cautions that a consolidation phase may be imminent following a failed attempt to break through the $65,000 barrier.

The report advises a cautious strategy after BTC’s impressive 22% increase. It is now plausible for the price to establish a new trading range and consolidate for a while, mirroring patterns seen after similar prior rallies sparked by spot purchases, which were later followed by activity in perpetual and futures markets.

Consequently, Bitfinex foresees a “correction” in the altcoin market, referring specifically to those outside the top 10 by market capitalization.