The Bitcoin open interest is a good indicator of how investors are viewing the cryptocurrency and what bets they’re making. This is why the metric hitting a new all-time high is a big deal, carrying serious implications for the market. Once again, the Bitcoin open interest has set a new record and this could spell doom for the digital asset, even if just in the short-term.
Bitcoin Open Interest Sets New Record
In an interesting turn of events, the Bitcoin open interest has now risen to a new all-time high. After hitting a record high of $39.03 billion back in May, the open interest had declined for a while, even dropping below $30 billion back in May.
Following this, the Bitcoin open interest fluctuated for a few months, taking the price along with it for the ride. However, with the recovery in the market, the open interest has been rising once again, exploding to new highs as the BTC price shot for $70,000.
On Monday, the Bitcoin open interest saw a notable surge, rising a whopping $1.5 billion in a single day. This translated to a 5.94% rise in the 24-hour period, according to data from Coinglasss and pushed the open interest above $39.5 billion, the highest on record s far.
The major surges in open interest came from exchanges such as Binance, Bybit, and OKX, all of which saw an average of an 8% increase in the Bitcoin open interest. For example, the Binance Bitcoin futures open interest made a new all-time high of $9.05 billion.
Implications Of A New OI ATH
The Bitcoin open interest reaching a new all-time high is indicative of increased interest as traders begin taking various positions in the cryptocurrency. However, in the past, when the open interest has reached new record highs, it has carried implications for the market.
Back in March, when the Bitcoin open interest reached an ATH, it indicated the top of the market, with the open interest falling over the next few months and the BTC price falling as well. Following the March ATH, the Bitcoin price saw a 20% drawdown less than two months later.
If this trend holds, then the recent ATH could be the signal for a decline. By Monday, the Bitcoin price had already started responding, falling from $70,000 to below $67,000 in a matter of hours before recovering. A continuation of this downtrend could easily send the Bitcoin price falling more than 10% from here again and reaching below $60,000.
Featured image created with Dall.E, chart from Tradingview.com