Bitcoin Open Interest Explodes 9% As BTC Recovers To $102,000

Bitcoinist
Updated
Mitrade
coverImg
Source: DepositPhotos

Data shows the Bitcoin Open Interest has seen a sharp increase alongside the recovery rally that the asset’s price has gone through.


Bitcoin Open Interest Has Observed A Spike Recently


As pointed out by CryptoQuant community analyst Maartunn in a new post on X, the Bitcoin Open Interest has shot up. The “Open Interest” here refers to an indicator that keeps track of the total amount of derivatives positions related to BTC that are currently open on all centralized exchanges.


When the value of this metric rises, it means that the traders are opening fresh positions on the market. As the total amount of leverage present in the sector rises when positions increase, this kind of trend can lead to more volatility in the asset’s price.


On the other hand, the indicator going down implies that the derivatives users are either closing up their positions of their own volition or being forcibly liquidated by their platforms. Such a trend may result in calmer price action for the cryptocurrency.


Now, here is a chart that shows the trend in the 24-hour percentage change for the Bitcoin Open Interest over the past month or so:


Bitcoin Open Interest


As is visible in the above graph, the Bitcoin Open Interest has recently registered a sharp positive change, which suggests that investors have opened up a large number of positions inside a short window.


The impetus behind this trend is likely to be the notable price recovery that the cryptocurrency has seen during the last couple of days. Investors find rapid moves in the asset to be exciting, so they tend to participate in more speculation than normal whenever they occur.


As mentioned before, an increase in the Open Interest can lead to BTC becoming more volatile. The reason behind this is the fact that mass liquidation events turn more probable the more leveraged positions there are in the market. Such events can be violent, with all the liquidations feeding back into the price move that triggered them.


Some growth in the Open Interest may still not be bad for the asset, but when it occurs inside a narrow window and is of a sufficiently large scale, the risk of the price being negatively affected can be considerable indeed.


As the analyst has highlighted in the chart, the latest jump in the Open Interest took its percentage change into a zone that has generally signaled trouble for Bitcoin in the past month.


Given this pattern, it now remains to be seen whether the derivatives market will have to see another cooldown before the asset’s rally can continue.


BTC Price


Bitcoin recovered above the $102,000 mark earlier, but the coin appears to have seen a pullback since then, as its price is back at $100,800.


Bitcoin Price Chart

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
Ethereum Surges Past $4,300 as Markets Await Pivotal CPI DataOver the weekend, Fed Vice Chair Michelle Bowman’s unexpected remarks fueled Ethereum’s surprise rise.
Author  Beincrypto
55 mins ago
Over the weekend, Fed Vice Chair Michelle Bowman’s unexpected remarks fueled Ethereum’s surprise rise.
placeholder
Bitcoin Bull Run at Risk as Whales Sell and Retail Buys In LateThe tug of war between Bitcoin bulls and bears since the asset reached its all-time high of $122,054 on July 14 has kept prices largely rangebound. 
Author  Beincrypto
Aug 08, Fri
The tug of war between Bitcoin bulls and bears since the asset reached its all-time high of $122,054 on July 14 has kept prices largely rangebound. 
placeholder
Bitcoin Breaks Into The Fed: Trump Names Stephen Miran GovernorPresident Donald Trump nominated Dr. Stephen Miran, the White House Council of Economic Advisers chair, to fill a vacant seat on the Federal Reserve Board of Governors.
Author  Bitcoinist
Aug 08, Fri
President Donald Trump nominated Dr. Stephen Miran, the White House Council of Economic Advisers chair, to fill a vacant seat on the Federal Reserve Board of Governors.
placeholder
Silver price forecast: XAG/USD stays above $38.00 on Fed rate cut bets, tariff concernsSilver price (XAG/USD) extends its gains for the second successive session, trading around $38.20 per troy ounce during the Asian hours on Friday.
Author  FXStreet
Aug 08, Fri
Silver price (XAG/USD) extends its gains for the second successive session, trading around $38.20 per troy ounce during the Asian hours on Friday.
placeholder
Top 3 Price Prediction: Bitcoin, Ethereum, Ripple – BTC, ETH, XRP rally as Trump moves to allow crypto in 401(k) plansBitcoin (BTC), Ethereum (ETH), and Ripple (XRP) prices are approaching their key resistance levels on Friday after rallying by 2%, 6% and 11%, respectively, in the previous day.
Author  FXStreet
Aug 08, Fri
Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) prices are approaching their key resistance levels on Friday after rallying by 2%, 6% and 11%, respectively, in the previous day.
Real-time Quote