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Bitcoin Futures Open Interest Reaches Highest Level in Over 2 Years, Tops $21 Billion

The conceptual open interest, reflecting the total value locked within active Bitcoin (BTC) futures contracts, has surged to its highest point in over two years.

Data from CoinGlass reveals that the open interest in both perpetuals and standard futures has exceeded $21 billion, a level not seen since November 2021 when the primary cryptocurrency reached its peak of approximately $70,000.

As of the current moment, Bitcoin is trading at approximately $49,700, showing minimal change over the past day.

Year-to-date (YTD), Bitcoin futures open interest has risen by 22%, approaching the previous peak of $24 billion recorded in mid-November 2021.

Rise in Open Interest Suggests Renewed Interest in Futures

The increase in open interest signifies a resurgence in interest in leveraged products such as futures and affirms the prevailing bullish sentiment in the market.

Bitcoin has undergone an impressive 28% surge in a span of just over three weeks, predominantly fueled by substantial inflows into recently introduced spot ETFs in the United States.

It’s crucial to acknowledge that leverage magnifies both gains and losses, thus a notable uptick in futures open interest could serve as a potential indicator of increased price volatility.

Nevertheless, despite the rise in open interest, the overall leverage in the market remains relatively subdued.

This indicates a reduced likelihood of sudden liquidations of long (buy) positions, which could potentially trigger a significant price crash.

Liquidations happen when exchanges forcefully close bullish or bearish positions due to a shortage of margin, often leading to substantial volatility in the market.

According to data from CryptoQuant, Bitcoin’s estimated leverage ratio has marginally increased from 0.18 to 0.20. However, these levels are far below those observed in August of the previous year.

Furthermore, the current futures open interest in BTC terms, which accounts for the price effect, stands at 430,500, still significantly lower than the peak of 660,000 reached in October 2022, as reported by CoinGlass.

Analysts Expect Bitcoin to Reach $70,000 This Year

Analysts at investment firm Bernstein foresee Bitcoin resuming its upward trajectory, surpassing its previous all-time high of $69,000 and potentially reaching $70,000 within this year.

The analysts have voiced confidence in the cryptocurrency’s risk-reward profile, asserting that no significant obstacles are expected to hinder its ascent.

In a communication to investors, analysts Gautam Chhugani and Mahika Sapra highlighted the recent introduction of 10 Bitcoin spot exchange-traded funds (ETFs) in the United States, which briefly propelled Bitcoin to $49,000.

Similarly, Anthony Scaramucci, the founder and managing partner of hedge fund SkyBridge, has proposed that the price of Bitcoin could potentially soar to $170,000 in the coming year.

Scaramucci’s prediction is rooted in two key factors, namely the increasing demand for newly listed exchange-traded funds (ETFs) and the upcoming halving event scheduled for April.

He elaborated that if Bitcoin maintains its current price of around $45,000 at the time of the halving, it could experience a remarkable surge to $170,000 by mid-to-late 2025.

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