Bitcoin Open Interest Sets New All-Time High: Is Price Next?


Data
shows
the
Bitcoin
derivatives
Open
Interest
has
shot
up
to
a
new
all-time
high
(ATH)
recently.
Here’s
what
this
could
mean
for
the
asset’s
price.

Bitcoin
Open
Interest
Has
Registered
A
Steep
Rise
Recently

In
a

post
on
X,
CryptoQuant
Netherlands
community
manager
Maartunn
has
discussed
about
the
latest
trend
in
the
Open
Interest
for
Bitcoin.
The
“Open
Interest”
here
refers
to
the
total
amount
of
derivatives
positions
related
to
the
cryptocurrency
that
are
currently
open
on
all
exchanges.

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When
the
value
of
this
metric
rises,
it
means
the
investors
are
opening
up
fresh
positions
on
the
market
right
now.
Generally,
the
total
amount
of
leverage
in
the
sector
goes
up
when
this
trend
forms,
so
it
may
lead
to
the
asset’s
price
registering
a
higher
degree
of

volatility.

On
the
other
hand,
a
decrease
in
the
indicator
suggests
the
derivatives
users
are
either
closing
up
positions
of
their
own
violation
or
getting
forcibly
liquidated
by
their
platforms.
Either
way,
the
coin
could
become
more
stable
following
such
a
drop,
due
to
the
decreased
leverage.

Now,
here
is
a
chart
that
shows
the
trend
in
the
Bitcoin
Open
Interest
over
the
past
few
years:

The value of the metric seems to have been climbing up over the last few days | Source: @JA_Maartun on X

As
is
visible
in
the
above
graph,
the
Bitcoin
Open
Interest
had
sharply
risen
earlier
in
the
year
when
the
cryptocurrency’s
price
had
witnessed
its
rally
towards
the
new
ATH.

In
this
surge,
the
indicator
had
surpassed
its
record
value
set
during
the
peak
of
the

2021
bull
run.
As
the
price
fell
to
consolidation
following
the
mid-March
ATH,
though,
the
metric
also
observed
a
cooldown.

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With
the
latest
recovery
run
for
Bitcoin,
however,
the
trend
has
once
again
seen
a
reversal
for
the
Open
Interest,
as
investors
have
rapidly
started
opening
new
positions.
The
indicator’s
value
has
now
surpassed
the
high
seen
earlier
in
the
year,
and
by
a
margin
at
that.

It
would
appear
that
speculation
has
made
a
return
in
the
market
in
full
force
and
as
it
has
often
happened
historically,
these
extreme
levels
of
Open
Interest
could
once
again
result
in
some
sharp
price
action
for
the
cryptocurrency.
The
direction
of
these
fluctuations,
of
course,
can
be
in
either
direction.

As
mentioned
earlier,
the
reason
volatility
goes
up
after
an
increase
in
the
Open
Interest
is
due
to
a
rise
in
the
leverage.
When
leverage
increases,
mass
liquidations
become
more
probable
to
take
place
in
the
market.
It’s
these
high
amount
of
liquidations
that
can
trigger
chaos
in
the
market.

In
an
earlier
X

post,
Maartunn
had
shared
how
the
the
aggregated
Open
Interest
in
the
cryptocurrency
sector
as
a
whole
had
been
approaching
an
ATH.
Therefore,
it
would
appear
that
Bitcoin
isn’t
the
only
coin
that
has
been
witnessing
an
increased
appetite
for
speculative
activity
recently.

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Looks like the metric's value has been going up recently | Source: @JA_Maartun on X

BTC
Price

At
the
time
of
writing,
Bitcoin
is
floating
around
$71,000,
up
more
than
4%
over
the
past
week.

The price of the coin appears to have registered an uplift in recent days | Source: BTCUSD on TradingView

Featured
image
from
Dall-E,
CryptoQuant.com,
charts
from
TradingView.com

Go to Source
Author: Keshav Verma


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