bitcoin open interest has increased in recent weeks as the price has continuously increased. This sustained increase in open interest is a reflection of the increased interest in the cryptocurrency since the United States Securities and Exchange Commission (SEC) approved spot bitcoin ETF trading. btc open interest has now risen to all-time highs, reaching all-time highs in 2021.
bitcoin open interest at 2021 levels
According data According to Coinglass, bitcoin open interest has risen to over $24 billion. This growth represents around a 50% increase in open interest since the year 2024 began. But more importantly, open interest has increased to levels not seen since 2021.
Looking at the open interest chart, the last time bitcoin's OI reached this high level was in November 2021, when the cryptocurrency hit its all-time high price of $69,000. This increase in OI has been consistent across all crypto exchanges, with CME, Binance, and ByBit leading the charge and controlling over 50% of the open interest.
<img decoding="async" class="alignnone wp-image-575811 aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/02/Bitcoin-Open-Interest-Hits-ATH-Levels-of-69000-What-This.png" alt="bitcoin Open Interest” width=”1013″ height=”372″ srcset=”https://www.newsbtc.com/wp-content/uploads/2024/02/Screenshot-2024-02-19-at-12.44.36.png?w=2860 2860w, https://technicalterrence.com/wp-content/uploads/2024/02/Bitcoin-Open-Interest-Hits-ATH-Levels-of-69000-What-This.png 460w, https://www.newsbtc.com/wp-content/uploads/2024/02/Screenshot-2024-02-19-at-12.44.36.png?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2024/02/Screenshot-2024-02-19-at-12.44.36.png?w=860 860w, https://www.newsbtc.com/wp-content/uploads/2024/02/Screenshot-2024-02-19-at-12.44.36.png?w=1536 1536w, https://www.newsbtc.com/wp-content/uploads/2024/02/Screenshot-2024-02-19-at-12.44.36.png?w=2048 2048w, https://www.newsbtc.com/wp-content/uploads/2024/02/Screenshot-2024-02-19-at-12.44.36.png?w=750 750w, https://www.newsbtc.com/wp-content/uploads/2024/02/Screenshot-2024-02-19-at-12.44.36.png?w=1140 1140w” sizes=”(max-width: 1000px) 100vw, 1000px” loading=”lazy” data-recalc-dims=”1″/>
Source: Coinglass
The continued rise has also been accompanied by an increase in greed levels among cryptocurrency investors. Currently, the crypto Fear & Greed Index is holding steady on Greed, suggesting that cryptocurrency investors are in a position where they are willing to take on more risk than usual.
Implications for btc price
With bitcoin open interest so high, it could end up being negative for the btc price. This is because past returns where open interest rose so quickly often ended in a market crash. The same thing happened in 2021, when bitcoin OI set its previous record.
In 2021, when the btc price surpassed $69,000 and open interest surpassed $22 billion, the euphoria was incredibly high as it is now. However, this would be short-lived and a market crash would occur shortly after. The price of btc would eventually go from $69,000 to $46,000 in December, dropping almost 40% in the space of a month.
If this same trend were to repeat itself in the current trend, then there could be a massive drop in the bitcoin cards. A similar drop would see bitcoin fall back towards $41,000, erasing the gains of recent weeks.
However, there are different factors at play in the current market, such as bitcoin Spot ETF issuers seeing massive interest in their exchange-traded products. Just last week, btc spot ETF inflows hit a new record of $2.2 billion. So if these large institutions continue to purchase btc to meet their customer demand, then the price of btc could continue to rise.
<img loading="lazy" decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2024/02/Bitcoin-Open-Interest-Hits-ATH-Levels-of-69000-What-This" alt="Tradingview.com bitcoin Price Chart ” width=”3286″ height=”1530″/>
btc bulls push price above $52,300 | Source: BTCUSD on Tradingview.com
Featured image of Barron's, chart from Tradingview.com
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