Binance BTC open interest surges by $500M following positive US inflation report

Bitcoin Open Interest (OI) on leading crypto exchange Binance soared to $500M shortly after the CPI data release.

Coinglass data shows the exchange witnessed a surge in OI for the largest crypto by market cap on January 15 within hours of the release of lower-than-expected US Consumer Price Index (CPI) data for December. 

The CPI report showed a fall in core inflation, giving crypto investors hope that the Federal Reserve will announce interest rate cuts throughout 2025.

CryptoQuant analyst Burakkesmeci says the statistics presented a positive macroeconomic forecast which resulted in a sudden boost for the crypto market. The news brought “smiles to the faces of crypto investors and signals a positive shift for risk-on markets,” the analyst wrote. 

Bitcoin OI jumps to $10.96 billion on Binance

Within two hours of the CPI news, Binance’s Bitcoin OI increased by 3.3% to reach $10.96 billion yesterday. This trend continued in the last 24 hours, with OI for BTC currently standing at $12 billion. The metric has, however, experienced a minor 0.41% drop in the last hour.

Despite the drop, Bitcoin OI reached $63.19 billion across all major exchanges, which represents a $3 billion increase over the last 24 hours. 

Bitcoin OI monitors unsettled contracts such as futures and options, and rising figures frequently signal increased market activity and bullish sentiment. 

Bitcoin price reaction

Bitcoin’s price rose from $96,000 to a high of $100,500 before retesting at $99,587, CoinMarketCap data shows. The increase in BTC’s price came amid a broader market rally throughout the past day of trading.

Sentiment also improved, as evidenced by the Crypto Fear & Greed Index that rose five points to a “Greed” score of 75. Crypto market participants regard the current increase as a positive sign of market revival.

Burakkesmeci added that during a bull market, it’s “crucial” for spot trading to have support from the futures market. 

The recent pump in BTC’s price comes after the top crypto found itself in a negative trend after reaching its all-time high in the last quarter of 2024. Should the US Federal Reserve ease its monetary policy or announce interest rate cuts in the coming months, BTC stands to benefit. 

However, several crypto analysts still warn of short-term volatility. Fundstrat Capital’s Chief Investment Officer stated on January 14, “I don’t think anyone is going to lose money buying here at $90,000. If they’re trying to time this, maybe they get lucky, and it goes to $70,000.”

As excitement grows about possible rate cuts in 2025, the cryptocurrency market may continue to attract institutional and retail investors. A positive macroeconomic environment with greater market participation might pave the way for a sustained bull run, especially after pro-crypto Donald Trump takes the White House on January 20.

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