Bitcoin Futures Open Interest Reaches Highest Level in Over 2 Years, Tops $21 Billion
The notional open interest, which represents the dollar value locked in active Bitcoin (BTC) futures contracts, has surged to its highest level in more than two years.
According to data by CoinGlass, the open interest in both perpetuals and standard futures has surpassed $21 billion, a level last seen in November 2021 when the leading cryptocurrency reached its all-time high of around $70,000.
At the time of writing, Bitcoin is trading at around $49,700, almost flat over the past day.
Year-to-date (YTD), Bitcoin futures open interest has surged by 22%, coming close to the previous record of $24 billion observed in mid-November 2021.
The rise in open interest indicates a renewed interest in leveraged products like futures and confirms the current bullish sentiment in the market.
Bitcoin has experienced a remarkable 28% rally in just over three weeks, largely driven by significant inflows into newly launched spot ETFs in the United States.
It’s important to note that leverage amplifies both profits and losses, making a notable increase in futures open interest a potential indicator of heightened price volatility.
However, despite the surge in open interest, the overall leverage in the market remains relatively low.
#Bitcoin Open Interest is up only since February.
It increased by +$3.3 Billion or +32%.
Spot premium & Funding rates still neutral so that's good. pic.twitter.com/dSa0YmZEn2
— Daan Crypto Trades (@DaanCrypto) February 12, 2024
This suggests a lower likelihood of sudden liquidations of long (buy) positions, which could trigger a significant price crash.
Liquidations occur when exchanges forcefully close bullish or bearish positions due to a margin shortage, and such events often introduce substantial volatility into the
Read more on cryptonews.com
