Bitcoin has reached an all-time high: Open interest exploded after surpassing 75K

Bitcoin has reached an all-time high: Open interest exploded after surpassing 75K

In early November 2024, Bitcoin (BTC) experienced a surge of interest when its price reached a new high of $75,109, leading to an incredible surge in open interest in the market. Open interest, the total volume of outstanding derivative contracts, rose to $45.4 billion shortly after Donald Trump's victory in the US election, which brought optimism to the market.

Bitcoin's open interest has risen 13.3% since November 5, when the price surpassed the previous record of $73,800 set in March. This indicator shows that traders are creating new positions, suggesting that further growth is expected.

What does open interest mean?

Open interest in bitcoin increases when the volume of new long positions being opened by buyers or new short positions being taken by sellers exceeds the volume of contracts that were closed on a given day. In the current case, traders believe that Bitcoin might not return to price levels around $73.679 anytime soon, which could result in the liquidation of $1.26 billion worth of contracts.

At the time of writing, Bitcoin was trading around $75.792 and analysts suggest that the market is in an ideal range for further growth. Renowned analyst Peter Brandt states, "Bitcoin is now in the sweet spot of a bull market halving cycle that should peak in the $130,000 to $150,000 range in August or September next year."

Growth on the horizon

While reaching all-time highs may raise concerns of overvaluation for many new investors, some analysts are optimistic about Bitcoin's future. Cryptoanalyst Rajat Soni, for example, argues that we are only at the beginning of Bitcoin adoption. "We're so early in Bitcoin adoption that you can still exchange pieces of paper ($, €, £, etc.) for BTC because most of the world still believes that fiat currencies are backed by something tangible."

The views of analyst firm CryptoQuant appear to be the same: Bitcoin is "not overheated," according to them. They further stated that the market-to-value ratio (MVRV) is still far from peak levels.

Conclusion

Bitcoin is on the cusp of a new era, with its price reaching all-time highs, and the open interest in the cryptocurrency suggests that investors still believe in its further potential growth. While the market situation is constantly evolving, one thing is certain - Bitcoin remains one of the most important and followed assets in the cryptocurrency world.

*This is not investment advice.

Coingarage team