Open interest in Bitcoin has been a topic of discussion over the past week, as several on-chain platforms revealed their recent record high. However, investment analytics firm Alfractal disputed that open interest in Bitcoin has reached a new all-time high.
Interestingly, the prominent cryptocurrency analytics platform has released new data on Bitcoin open interest, revealing that this indicator has already hit a record high over the past week. Here is its potential impact on the BTC price.
Are Bitcoin traders taking more risks?
In a new post on the X platform, Glassnode open Open interest in Bitcoin across all exchanges has reached a new all-time high.
Glassnode on X wrote:
Open interest across perpetual and fixed-term futures recorded a new ATH of $32.9 billion this week, indicating a notable increase in total leverage entering the system.
For context, open interest is an index that measures the total amount of futures contracts or derivatives for a given cryptocurrency (BTC, in this scenario) on the market at a given time. It usually provides insight into how much money is invested in Bitcoin futures at the moment. The rise in open interest also indicates a shift in investor sentiment and an increase in speculation in the market, with many traders preparing for the market movement.
Source: Glassnode/X
With Bitcoin’s open interest rising to a new all-time high of $32.9 billion last week, it shows that new capital is flowing into the most valuable market in the cryptocurrency industry. Although the metric does not provide information on whether these new futures positions are bearish or bullish, it does indicate the potential for higher market volatility.
As Glassnode highlighted on X, there is a significant increase in total leverage entering the Bitcoin derivatives market. From a historical perspective, the market tends to experience large, spontaneous price fluctuations whenever there is increased risk-taking behavior on the part of traders.
These market forecasts set up an interesting next few weeks for the Bitcoin price, which was not particularly impressive in October. After forming strong bullish momentum in the previous week, the major cryptocurrency has failed to benefit in the past few days.
BTC price at a glance
As of this writing, Bitcoin’s price is just below the $67,000 level, reflecting a 2.1% decline over the past 24 hours. Meanwhile, the leading cryptocurrency fell by roughly the same number on the weekly time frame, according to data from CoinGecko.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView