- Bitcoin open interest hits a record $19.8 billion, signaling increased market depth and investor involvement.
- Funding rates reach peak levels since August, reflecting traders’ bullish sentiment and favoring long positions.
- Bitcoin’s open interest surge and price increase point to growing institutional participation and market liquidity.
CryptoQuant recently reported that the open interest in Bitcoin has hit a record $19.8 billion. This increase in open interest signal a ramp up in investors’ involvement and market depth in the BTC futures and options market. Funding rates have also reached their peak positive levels since August of this year, which means that majority of the traders are open to long positions, meaning that the market is very bullish.
An increase in funding rates is indicative of traders being positive about upcoming value hikes of cryptocurrency, and placing their bets on it. This positive trend can be seen at the moments when both institutional and retail investors show their interest in Bitcoin as the primary cryptocurrency. Interest in Bitcoin derivatives suggests that institutional investors are pouring money into the market, expecting it to remain relevant in the future.
Bitcoin Market Expansion
Daan Crypto Trades came in with a more rational view of the situation, namely the relatvity of the market to Bitcoin. He emphasized that current open interest is much higher than in 2021 while Bitcoin price was around the same levels as today. The growth of the open interest in coin shows that the market has been expanding and becoming more complex in the last few years.
In an X post on Tuesday, he noted that the price of a token has not changed much since previous peaks; however, the market has expanded and become more liquid. As of 2021 open interest is around $12 billion, it has now grown to over $19.8 billion This growth shows that Bitcoin is being taken up by a wider variety of market participants, including institutional investors who provide better stability and depth to the market.
Bitcoin Price Surge
Apart from the increase in open interest, the price of Bitcoin also spiked in the beginning of this week. According to the analytics platform Santiment, the price of BTC rose by 6.9% in the eight hours period. This was due short liquidations, where people who had taken short positions on BTC had to buy back their contracts pushing the price up even more. The boom in Tether and other stablecoin inflows into exchanges also played a part in the buying spree, as it provided more capital for the market.
The market keeps looking good with open interest at an all-time high and the price of Bitcoin on the rise. The improved liquidity, as well as the generally positive sentiment, indicate that cryptocurrency might proceed with the upward trend in the next several weeks. BTC is trading at $65,639 at the moment and has shown a 1.13% increase in the last 24 hours.
Source: TradingView
The attention and liquidity which Bitcoin is still drawing make it look like the king of the cryptocurrency market. The growing open interest and price increase may signal the start of a new crypto market cycle with more gains to be seen in the year.
