PakGazette – Although the recent price performance has attracted a lot of attention, the explosive rise in open interest (OI) is the real story. Bitcoin open interest increased by approximately $2 billion in the past day, indicating increased trading activity and increased investor interest in the leading cryptocurrency.
The total number of active contracts in the futures and options markets is represented by open interest. An increase in OI is generally associated with higher expectations of volatility and greater participation in derivatives markets. This significant increase in OI highlights the market’s heightened expectation about Bitcoin’s next move, as the cryptocurrency is currently trading at around $102,500.
Surprisingly, funding rates remain low despite the increase in OI. This shows that the market sentiment is balanced and neither the longs nor the shorts are taking control. When the OI is this high, a neutral funding rate may indicate that traders are being cautious and holding off on making strong directional bets until there is a clear move. The chart also indicates that the recent rise in Bitcoin price has been accompanied by strong trading volume.
This strengthens the argument for continued momentum. The idea that Bitcoin could once again dominate the market cycle is supported by the fact that (ETH) saw a small decline in its own open interest during the same time period. The immediate support at $97,000 and resistance at $105,000 are important levels for BTC and could determine the asset’s movements in the foreseeable future.
A pullback towards the 50 EMA at $87,000 could be due to failure to hold support, while a break above resistance could open the door to a test of $110,000. Bitcoin’s rising price action and overall OI point to a shift in market dynamics, positioning the cryptocurrency to outperform other major cryptocurrencies in the near future. To determine the strength of this trend, traders should closely monitor funding rates and volume spikes.
