Bitcoin has achieved a new milestone, with its value significantly increasing over the last month. As the week commenced, Bitcoin’s price surpassed the $57,000 mark for the first time since November 2021, marking a notable moment in its trading history.
This upward trend has sparked considerable interest in Bitcoin-based derivatives, leading to an unprecedented surge in open interest for Bitcoin futures. The open interest in Bitcoin futures has shattered previous records set in 2021 and 2017, indicating a robust and growing market.
As of mid-October 2023, Bitcoin derivatives have shown remarkable growth in terms of open interest and the overall volume of Bitcoin futures. Open Interest (OI) in derivatives markets represents the total number of unsettled derivative contracts, such as futures, that remain active. Essentially, it serves as an indicator of capital influx into the Bitcoin derivatives market. Currently, Bitcoin futures’ open interest rates have reached an all-time high (ATH) of $24.44 billion as of February 27, 2024.
This new ATH surpasses the OI recorded just before BTC hit $69,000 per unit in November 2021, which was reported at $23.06 billion. The record set on February 27 also exceeded the OI reached on April 13, 2021, by $170 million, standing just shy of the current record at $24.27 billion.
CME Group leads the Bitcoin derivatives market in futures open interest (OI) with 137,550 BTC, equivalent to $7.77 billion, holding a significant 31.79% share of the total market. Binance closely follows in second place with 108,280 BTC or $6.13 billion in profit, and Bybit in third with $4.10 billion.
Okx also plays a significant role in the Bitcoin futures market with $2.47 billion in value. Other notable exchanges supporting BTC futures include Bitget, Bingx, and Deribit. In addition to high Bitcoin futures metrics, Bitcoin options OI has also been noticeably high.
Although the current figure has not surpassed the BTC options OI recorded in December 2023, it has already exceeded the peaks of April and November 2021. On Tuesday, February 27, Bitcoin’s spot market price reached a high of $57,315 on Bitstamp.
Thus, like other market indicators, Bitcoin futures OI provides a clear picture of trader sentiments. Historically, when OI increases, the trend leans bullish, and when OI decreases, the trend tends toward bearish sentiments. Currently, all metrics indicate a bullish trend.
Those suggesting it’s time to prepare Bitcoin shorts likely lean towards the theory of an altcoin spring. However, it’s essential to understand that while Bitcoin and altcoins trade on the same exchanges and share characteristics like blockchain and decentralization, Bitcoin stands as a signal, and cryptocurrency is the background noise. Bitcoin represents innovation, while cryptocurrency trading can be akin to gambling. Choose your path wisely.