Market sentiment around Bitcoin has flipped bullish again as open interest recently reached new highs in a short timeframe.
Bitcoin has gained 10% in the past seven days, reaching highs last seen since July. The jump in bitcoin’s price has understandably caused market sentiment to shift from bearish to bullish.
More traders who have been observing the leading crypto asset on the sidelines have also jumped in, as indicated by a surge in open interest in Bitcoin futures.
According to data from Coinalyze, open interest in Bitcoin futures surged by over $1.5 billion in the past seven days. Open interest measures the value of Bitcoin futures and perpetual contracts across different exchanges.
An increase in open interest typically suggests an inflow of capital and increased investor interest in an asset. This surge typically corresponds with an increase in price, except during extremely bearish market periods where most trades are short an asset.
In the case of BTC’s recent rise, open interest has followed the traditional path of being a precursor to a price increase.
At the time of writing, Bitcoin’s open interest stands at $9.77 billion, with the price sitting pretty above $30,000. Notably, the current open interest figure represents the highest that BTC has recorded since August 17.
Beyond price figures, data further reveals that Binance has retained its leading position in the BTC open interest market despite the company’s ongoing regulatory woes.
Binance is home to $3.2 billion, or roughly 30% of the global BTC open interest. Its closest competitor, Bybit, records $2.3 billion, trailed by OKX and Deribit, at $1.7 billion, and $1 billion, respectively.
Bitcoin ETF Speculation a Key Catalyst Behind BTC Recovery
Bitcoin’s recent surge of 10% in the past seven days has been largely attributed to speculation that the United States will soon approve its first spot Bitcoin ETF.
Following applications by established traditional market players such as BlackRock, Fidelity, and Franklin Templeton, as well as Grayscale’s recent court victory, many market participants have expressed optimism about an approval coming soon.
If the predictions do come true, a spot Bitcoin ETF in the United States would pave the way for more institutional capital to flow into Bitcoin. Additionally, such a feat would further legitimize the asset and shape mainstream perception in a positive way.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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