Bitcoin Open Interest Surges to New All-time High
07 Nov, 2024 ● Coin news
Bitcoin Open Interest (OI) has reached a record high as Bitcoin surged to $75,000, with several analysts predicting potential further gains.
Bitcoin OI, which measures the total number of open Bitcoin derivative contracts such as options and futures, hit $45.4 billion, marking a 13.3% increase since Nov. 5, when Bitcoin’s price surpassed its previous all-time high of $73,800 set in March, as reported by CoinGlass.
OI rises when the number of new long positions initiated by buyers or new short positions by sellers exceeds the number of contracts closed on a given day.
Traders do not seem to expect Bitcoin's price to fall back to the previous high of $73,679 soon, with $1.26 billion in short positions facing potential liquidation if the price remains high.
As of the latest update, Bitcoin was trading at $75,792, based on TradingView data, and analysts believe the current price range is promising.
“Bitcoin is now in the sweet spot of the bull market halving cycle that should top in the $130k to $150K range next Aug/Sep. I measure cycles differently than most,” veteran trader Peter Brandt wrote in a Nov. 6 X post.
While some newer crypto investors worry that Bitcoin may be overvalued when it hits all-time highs, not all analysts share this view.
Crypto analyst Rajat Soni emphasized that it's still early in Bitcoin's adoption phase, saying, “We are so early in Bitcoin’s adoption that you can still exchange pieces of paper ($, €, £, etc.) for BTC because most of the world thinks fiat currencies are backed by something tangible.”
Supporting this, crypto analysis firm CryptoQuant stated that Bitcoin is “not overheated” yet.
“Bitcoin’s new all-time high doesn’t mean it’s overvalued relative to its cost basis,” the firm wrote in a Nov. 6 X post.
CryptoQuant also noted that Bitcoin’s Market Value to Realized Value (MVRV) ratio is “still far from peak levels.”
The MVRV ratio is a metric that indicates if Bitcoin may be overbought; the higher the MVRV, the greater the likelihood of an overbought signal.
When Bitcoin hit its previous all-time high of $73,679 in March, the MVRV was around 2.87, according to Bitbo data.
Currently, Bitcoin’s MVRV score stands at 2.19.
Sources:
https://www.coinglass.com/pro/dashboard/bitcoin
https://www.tradingview.com/symbols/BTCUSD/
https://x.com/PeterLBrandt/status/1854280831969231109
https://x.com/shab_tamuh/status/1854296982686220337
