Boom of open interest: Bitcoin futures hit a historic record

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The open interest on Bitcoin futures has reached an unprecedented peak, hitting an all-time high after the latest price increase. 

According to the data provided by Coinglass, the total open interest for Bitcoin futures has exceeded 26 billion dollars on centralized exchanges. Let’s see all the details below. 

Open interest for Bitcoin futures exceeds all expectations

As anticipated, based on the data provided by Coinglass, the open interest in Bitcoin futures on centralized exchanges has recently reached its historical maximum.

This increase exceeds the levels recorded in November 2021, when Bitcoin had marked its all-time high of over 68,000 dollars, highlighting an increase in trading activity related to the main cryptocurrency.

CoinGlass reports that the aggregated open interest for Bitcoin futures surpassed 26 billion dollars last Friday, even exceeding the peak of 24 billion dollars reached in the last quarter of 2021. 

Starting from the beginning of 2024, the open interest in Bitcoin futures has seen an increase. This is parallel to the rise in the price of the digital asset, recently peaking at over $64,000 at the beginning of this week.

The open interest, which represents the total value of all active Bitcoin futures contracts on different exchanges, is an indicator of growing market activity and traders’ sentiment towards the asset. 

This significant increase in open interest is confirmed by the data from The Block’s Data Dashboard. Which highlights a peak of over $21 billion in open interest for Bitcoin futures on platforms like Binance, OKX, Deribit and others.

QCP Capital: retail exchanges like Binance dominate Bitcoin futures price action

The market report from QCP Capital on Friday indicated that retail-oriented exchanges, such as Binance, played a predominant role in the price movement of Bitcoin perpetual futures in the last week. 

During this period, these futures were traded with premiums ranging from 70 to 80 dollars compared to the spot price. 

The report highlighted that the recent Bitcoin rally, which surpassed $64,000, was fueled by an increase in speculative retail buying.

The Weekly Market Report of Coinbase has added another relevant aspect. In particular indicating that the weighted average funding rate for open interest reached 109% annualized on February 28th.

This level has not been observed since April 2021, according to Glassnode.

Between February 25th and 28th, almost 750 million dollars of short positions were liquidated. Furthermore, each day marked a new annual high in liquidations.

However, Coinbase analysts believe that, despite approaching the end of the short position coverage, it is not yet completely concluded.

Coinbase’s report also highlighted that the recent positive movement in funding rates and open interest could have consequences. Especially if the liquidation of positions triggers a cascade of long liquidations. 

Nevertheless, Coinbase analysts maintain an overall positive outlook for the coming months. 

Considering the continuous boarding of spot ETFs by asset management companies and the net inflows that absorb the liquid supply in circulation at a pace faster than that of bitcoin miners.