Bitcoin is trading at September highs and recovering after breaking above $66,000 on October 14. Although the currency is trading lower at spot rates, the path of least resistance appears northward and the trend is shifting, in line with Q1 2024 gains.
Bitcoin Open Interest is Rising, Approaching $40 Billion
After months of lower lows, the world’s most valuable currency is rising, and sentiment is improving with it. The latest market data shows that open interest for Bitcoin on all major derivatives exchanges is approaching all-time highs.
According to Coinglass, open interest rose to over $39 billion by March 2024. As of October 15, Bitcoin’s open interest is over $37.6 billion, up from yesterday’s $34.6 billion.
Open interest is usually used to gauge trader interest. The exchange data combines the number of all leveraged short and long positions placed by traders on top exchanges including Binance and Bite.
Because open interest is not directional and does not indicate whether there are more buyers or sellers at any given time, the metric measures traders’ interest and willingness to participate.
Whenever cryptocurrency prices rise, as was the case from the start of the fourth quarter of 2023, open interest started to rise before peaking at over $39 billion in March 2024.
Falling Bitcoin prices from the second quarter of 2024 also coincided with a contraction in open interest. On August 6, as BTC fell below $50,000, Bitcoin open interest plunged below $26 billion before steadily recovering.
Will BTC Prices Rise Above $74,000?
Given the pace of growth over the past 24 hours, it is highly likely that any break and close above $66,000 could attract more traders to open leveraged positions. In that event, Bitcoin’s open interest would rise above $40 billion, setting an all-time high.
On the daily chart, Bitcoin has strongly rejected $66,000, marking the September high. However, if the October 14 bulls return, prices could move higher, back to the July 2024 high of $70,000. For now, traders are confident that prices will be in line with September’s gains and rise to March highs.
While confidence is high, Coinglass’ long-short ratio data shows reveals fewer long than short volumes. Currently, 51% of BTC trading volume consists of sales, while 49% consists of buying volume. This data indicates that most traders are still bearish.
Feature image from Canva, chart from TradingView