Bitcoin Price to Benefit From Record High Open Interest as YTD Volatility Weakens
After reaching its all-time highest value of almost $67,800 in November 2021, the price of Bitcoin (BTC) has been on the decline ever since.
The pioneering cryptocurrency has halved in value since the start of the year and has demonstrated an overtly bearish trend for much of this period. But things may be starting to turn around.
Recent data collected across a variety of metrics now indicates that Bitcoin’s price bottom is in sight, and the market may be on the cusp of a sharp turnaround. And it appears that the institutional traders have already begun to make their moves.
Defined as the total number of contracts that are held by market participants and not yet settled, open interest (OI) is often used to gauge market sentiment — with high open interest usually taken as a bullish indicator.
Open Interest for Bitcoin perpetual futures on Binance, the world's largest cryptocurrency exchange, recently reached its all-time highest BTC-denominated value. This signals strong demand for the cryptocurrency among institutional investors — which remain the dominant force in the Bitcoin market and the main holders of derivatives positions.
According to data from Coinglass, the total open interest in BTC futures now stands at 763,830 BTC (or approx. $14.4 billion). This figure is down 20% YTD, while the price of Bitcoin is down 49% over the same period.
Binance has managed to capture a more than 26% market share, becoming by far the largest and most popular BTC futures exchange.
When considered in combination with changes in volume, open interest can be a powerful tool to identify changing trends in a market. Generally, growing volume and OI in tandem are taken as a bullish signal, whereas a decrease in one or the other is seen as a
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