Bitcoin has experienced a slight 3% rise, causing a surge in Open Interest. The Open Interest increased to over $19 billion after substantial liquidations of $2.5 billion in Futures positions. Bitcoin faces strong resistance at $63,400, with the recent price hovering around $62,700.
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The surge in Open Interest correlates with heightened volatility in Bitcoin Futures. Despite a large liquidation event, Open Interest levels have remained high. This signals continued trader interest.
⚡️CATHIE WOOD: “The more uncertainty and volatility there is in global economies, the more our confidence increases in #Bitcoin” pic.twitter.com/T1WAnO1W2T
— Cointelegraph (@Cointelegraph) October 14, 2024
During a recent rally, approximately $2.5 billion worth of Futures Open Interest was forcibly closed. This likely flushed out many short sellers. However, the percentage reduction in Open Interest across the top three perpetual exchanges remained below 5%.
https://twitter.com/Cointelegraph/status/1845769039777571309
This indicates that the market’s substantial impact did not lead to a dramatic collapse. This resilience suggests that the market, despite heightened volatility, could continue to affect leveraged traders. Historically, the total cost of leverage during Bitcoin’s all-time high in March reached as high as $120 million weekly.
$2.5B in futures open interest was closed during the rally, suggesting a flushing of short sellers. However, OI reduction on the top 3 perpetual exchanges didn’t surpass the 5% threshold🟨, leaving the market vulnerable to volatility and potential squeezes on leveraged traders. pic.twitter.com/TkjF8KJSTv
— glassnode (@glassnode) October 12, 2024
This figure has recently dropped to $15.3 million per week.
Bitcoin’s growing open interest trends
It reflects a significant reduction in speculative trades as the market entered a range-bound phase.
Despite earlier closures of large positions, traders are continuing to open new ones. Open Interest, which was around $17.5 billion on October 10, surged to over $19 billion by October 12. Although there has been a slight decline since then, Open Interest remained strong at over $18 billion.
This renewed trader interest is largely attributed to Bitcoin’s recent price increase, which pushed the cryptocurrency above the $63,000 mark. An analysis of Bitcoin’s daily price chart showed that BTC experienced a 3% price increase on October 11, reaching $62,500. This pushed the price above the 50-day moving average, previously a significant resistance level.
However, Bitcoin is now facing tougher resistance at its 200-day moving average, positioned around $63,400. While the recent price surge pushed BTC to around $63,100, it failed to break through this crucial level. As of this writing, Bitcoin has slightly declined to $62,700, marking a 1% drop and moving it farther from the resistance.
Despite a period of volatility and the forced closure of billions in Futures Open Interest, Bitcoin’s Open Interest remains strong. The recent price surge to $63,000 reflects increasing optimism among traders, although it faces strong resistance around $63,400. The coming days will determine whether Bitcoin can break through this barrier or continue to face challenges at this key price point.
