O Bitcoin Open Interest is a good indicator of how investors are viewing the cryptocurrency and what bets they are making. That’s why the metric hitting a new all-time high is a big deal, with serious implications for the market. Once again, Bitcoin’s open interest has set a new record, and that could spell doom for the digital asset, even if only in the short term.
Bitcoin Open Interest Sets New Record
In an interesting turn of events, Bitcoin’s open interest has hit a new all-time high. After hitting a record $39.03 billion in May, the open interest had been declining for a while, even falling below $30 billion in May.
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Following this, the Bitcoin open interest has been fluctuating for a few monthstaking the price along with it for the ride. However, as the market recovered, open interest rose once again, exploding to new highs as the price of BTC soared to $70,000.
On Monday, Bitcoin’s open interest saw a notable surge, rising by a staggering $1.5 billion in a single day. This translated to a 5.94% increase in the 24-hour period, according to data Coinglasss and pushed open interest to more than $39.5 billion, the highest on record to date.
The main increases in open interest came from exchanges such as Binance, Bybit and OKX, all of which saw an average increase of 8% in Bitcoin Open Interest. For example, Binance’s Bitcoin futures open interest hit a new all-time high of $9.05 billion.
Implications of a new OI ATH
Bitcoin’s open interest hitting a new all-time high is indicative of growing interest as traders begin to take multiple positions in the cryptocurrency. However, in the past, when the open interest reached new all-time highs, had implications for the market.
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In March, when the Bitcoin Open Interest Hits ATHindicated a market top, with open interest falling in the coming months and the price of BTC falling as well. After the March ATH, the price of Bitcoin suffered a 20% drop less than two months later.
If this trend continues, then the recent ATH could be the signal for a decline. On Monday, the price of Bitcoin had already started to respond, dropping from $70,000 to below $67,000 in a matter of hours before recovering. A continuation of this downtrend could easily see the price of Bitcoin drop by more than 10% from here again and reach below $60,000.
Featured image created with Dall.E, chart from Tradingview.com