Bitcoin’s open interest is a good indicator of how investors view the cryptocurrency and the bets they are making. That’s why hitting an all-time high is such a big deal, and it has huge implications for the market. Once again, Bitcoin’s open interest has hit a new record high, and this could spell doom for the digital asset, even in the short term.
Bitcoin Open Interest Hits New Record
In an interesting development, Bitcoin’s open share has now risen to an all-time high. After hitting an all-time high of $39.03 billion last May, Bitcoin’s open share had been declining for a while, even falling below $30 billion last May.
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After that, Bitcoin’s open interest fluctuated for several months, causing the price to fluctuate along with it. However, as the market recovered, open interest rose again, reaching new highs as Bitcoin’s price surged to $70,000.
On Monday, Bitcoin’s open interest saw a significant spike, rising by $1.5 billion in a single day. That’s a 5.94% gain in a 24-hour period, according to Data From Coinglasses, open interest pushed to over $39.5 billion, an all-time high.
The major spikes in open interest came from exchanges like Binance, Bybit, and OKX, which all saw an 8% increase in Bitcoin open interest. For example, Bitcoin futures on Binance hit an all-time high of $9.05 billion.
Implications of creating a new OI
Bitcoin’s open interest hitting an all-time high indicates increased interest in the cryptocurrency as traders start taking different positions in the cryptocurrency. However, in the past, when open interest reached new highs, it had an impact on the market.
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In March, when Bitcoin hit an all-time high, it signaled that the market had peaked, with the price of Bitcoin falling over the next few months and the price of Bitcoin also falling. After hitting its all-time high in March, the price of Bitcoin saw a 20% drop less than two months later.
If this trend continues, the recent high could signal a pullback. By Monday, Bitcoin had already started to respond, dropping from $70,000 to below $67,000 in a matter of hours before recovering. A continuation of this downtrend could easily see Bitcoin drop more than 10% from here back below $60,000.
Featured image created using Dall.E, chart from Tradingview.com