Bitcoin slips 2.4% but edges closer to the US$70k level. Bitcoin’s open interest in futures reaches an all-time peak at US$40.38 billion, reflecting critically huge bullish sentiment. In any case, even though short-run market volatility would remain. It has been the case that longer-term market ambiance and macro parameters continue to favor further swell in Bitcoin.
Movement in Recent Market and Conference Impact
Bitcoin is 2.4% off yesterday’s price. This has been on an upward trend over the last few weeks after touching the US$70k (AU$105k) level. Over the weekend, Bitcoin briefly touched US$68,560 (AU$103,036) in value, building towards the Nashville Bitcoin Conference.
BTC then surged to US$70,162 (AU$105,428) during the conference. This was due to comments from former President Donald Trump and Robert F. Kennedy. Trump promised at that conference to fire the head of the US Securities and Exchange Commission, Gary Gensler, on his first day in office. He even declared adding Bitcoin to the federal reserves.
Trump’s comment, “Never sell your bitcoin,” combined with Trump’s favorable odds on Polymarket, has probably contributed to Bitcoin’s good performance so far. Consequently, poll results have indicated a close race between Trump and Harris. As some analysts have suggested, irrespective of the victor, Bitcoin comes out good.
Rising Open Interest Reflects Bullish Sentiment
Despite the minor pullback, Bitcoin’s outlook continues to look bullish. In the report provided by Bitfinex, open interest OI has scaled to an all-time high ATH of US$40.38 billion AU$60.69 billion.
Open interest (OI) is a great metric for describing market sentiment. Increasing OI denotes a growing bullish sentiment. Data from Coinglass shows that this time, OI has surged past previous levels when Bitcoin never reached a new ATH.
BTC open interest refers to the number of outstanding Bitcoin futures or options contracts. This is a synonym for the total value invested in these derivatives. OI increases when traders enter a contract to wager on the price of Bitcoin and decreases once these contracts are settled or expire.
Analysts Observe Patterns in Bitcoin Open Interest
Analysts at Bitfinex noted a pattern in Bitcoin’s OI. They say Bitcoin’s price consistently fails to mark new highs when the OI is high. This was also seen at the peak of the “Trump trade” last July, indicating a disconnect between market speculation and solid demand.
High open interest can indeed indicate speculative overkill, but it does not always lead to negative scenarios.
Historical Example of OI and Price Movement
Examples include in October 2023, when a strong increase in OI coincided with Bitcoin’s price breaking above US$30k (AU$45k) amid strong market participation.
Analysts say OI can be prone to surges, similar to those created by price increases, which are then followed by consolidation.
According to them, these small pullbacks will continue while long-term market dynamics, fostered by macroeconomic factors and throttled trading activities, will continue providing a ‘perpetual-like’ incentive toward a continued growth trajectory for Bitcoin.
