- Open interest in BTC increased when the price reached the $70,000 mark.
- Traders continued to place their bets despite the large number of liquidations.
Bitcoin [BTC] has generated immense optimism among traders in the crypto space as the price of BTC rose and reached the $70,000 level.
Despite the high volatility, many traders were willing to bet on the price BTC would follow in the future.
Open interest is increasing
In the last 24 hours, a billion dollars in Open Interest has been added to the Bitcoin markets. More open interest generally indicates more influence on the market, which can amplify price swings in either direction.
Therefore, this development could worsen Bitcoin’s known volatility.
Source:
It is surprising that such a sudden increase was observed in terms of Open Interest as the recent price movements of BTC have caused massive liquidations for Bitcoin traders.
According to data from Coinglass, as many as 67,109 traders faced liquidation in the last 24 hours, resulting in a total liquidation amount of $190.70 million.
The largest individual liquidation occurred on Bybit for the BTCUSD pair, worth $1.94 million.
Furthermore, Coinglass highlighted a significant level of leverage, estimated at approximately $1.18 billion, just above the $73,000 threshold.
Source: Coinglass
Traders are turning bullish
At the time of writing, due to the increase in the price of BTC, the percentage of long positions had grown from 48% to 51%.
Although market sentiment around BTC had turned bullish, there could be some factors that could hinder BTC’s growth. One of these would be the peak in the MVRV ratio.
Source: Coinglass
An increase in the MVRV ratio indicated that most addresses holding BTC were profitable at the time of writing.
As the price of BTC rises, the general interest in profit taking would also increase, which could lead to price corrections.
Along with the MVRV ratio, the Long/Short difference for BTC also grew. This indicated that older BTC holders made up a large percentage of addresses holding the king coin.
These addresses are less likely to sell their assets and do not react hastily to sudden market movements.
Read Bitcoin’s [BTC] Price forecast 2024-25
Bitcoin’s ecosystem will also play a crucial role in determining the price of BTC. According to AMBCrypto’s analysis, the number of active addresses on the Bitcoin network had decreased significantly.
A lack of interest in the Bitcoin ecosystem could have a negative impact on BTC’s price in the long term.
Source: Santiment
