The open interest in Bitcoin is a good indicator of how investors view the cryptocurrency and what bets they are making. This is why it’s a big deal that the metric is hitting a new all-time high, with serious consequences for the market. Once again, Bitcoin’s open interest has set a new record and this 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, open interest in Bitcoin has now risen to a new all-time high. After hitting a record high of $39.03 billion in May, open interest had fallen for a while, even falling below $30 billion in May.
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After this, Bitcoin’s open interest fluctuated for a few months, causing the price to move along. However, with the market recovery, open interest rose again and exploded to new highs as the BTC price shot to $70,000.
On Monday, Bitcoin open interest saw a notable increase, rising as much as $1.5 billion in a single day. This translated into an increase of 5.94% in the 24-hour period facts of Coinglasss and pushed open interest above $39.5 billion, the highest on record.
The big increases in open interest came from exchanges like Binance, Bybit and OKX, all of which saw an average increase of 8% in Bitcoin open interest. For example, open interest on Binance Bitcoin futures hit a new all-time high of $9.05 billion.
Implications of a new OI ATH
Bitcoin open interest hitting a new all-time high is indicative of increased interest as traders begin to take various positions in the cryptocurrency. However, in the past, when open interest hit new all-time highs, it impacted the market.
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In March, when Bitcoin’s open interest hit an ATH, it signaled the top of the market, with open interest falling over the next few months and the BTC price also falling. After the March ATH, Bitcoin price saw a 20% drop less than two months later.
If this trend continues, the recent ATH could signal a decline. On Monday, the Bitcoin price already started to react, falling from $70,000 to less than $67,000 within hours before recovering. A continuation of this downward trend could see the Bitcoin price drop by more than 10% from here on out and fall below $60,000.
Featured image created with Dall.E, chart from Tradingview.com
