Bitcoin Smashes Through $51K Amid Massive Open Interest Hike

With Bitcoin’s market leverage building up slowly but steadily, all eyes are on BTC’s freshly-claimed yearly high.

People carrying a huge Bitcoin over their heads.
Created by Kornelija Poderskytė from DailyCoin
  • Bitcoin’s Open Interest (OI) tops $23 billion amid BTC’s parabolic run.
  • Bitcoin sets a new yearly high amid $53.58 million in short liquidations.
  • Anthony Scaramucci forecasts what Bitcoin will look like post-halving.

The number one digital asset, Bitcoin (BTC), is back in the limelight as retail traders have lost the fear instilled by the initial outflows of Grayscale’s exchange-traded fund (ETF). As these outflows significantly slowed after $5 billion, the positive market sentiment returned as BTC found its floor around the $38,600 area on January 23, 2024.

Since then, the king crypto’s only way has been up, as BTC finished January dwelling at around $42,500. The gradual growth of the world’s leading digital asset led to the moment every Bitcoin enthusiast has been waiting for – BTC soared past the $50,000 mark yesterday but traded slightly below the freshly-claimed milestone after a slight market correction.

However, Bitcoin successfully prepared for a second leg this Wednesday, surpassing the $51,000 mark for the first time since mid-November 2021. According to the technical on-chain data, a tremendous spike in Bitcoin’s Open Interest (OI) has heavily contributed to its latest bull run.

BTC’s Open Interest Breaks Records as Bears Get Rekt

The Open Interest depicts the dollar value locked up in the currently active contracts in the Bitcoin Futures market, which added over $3.3 billion to its liquidity since the beginning of February 2024. As cryptocurrency enthusiasts witness the largest notional OI hike since November 2021, the situation draws historical parallels to BTC’s $69K all-time high claimed over two years ago.

According to the latest blockchain data by CoinGlass, Bitcoin has garnered $68.91 billion in Derivatives trading volume over the past 24 hours. Indeed, with a whopping $53.58 million in liquidated short positions over the same timeframe, crypto bears are having a hard time. On top of that, prominent crypto figures like Anthony Scaramucci expect a rise to $170K after Bitcoin’s halving, which is slated for April 2024.

On the Flipside

  • The bullish trend heavily depends on the active Bitcoin ETFs, which picked up $630 million in inflows on Tuesday. 
  • As Grayscale’s investors stopped massively exiting ETF positions, some top exchanges still have more short positions than long.
  • To illustrate, Binance’s long versus short BTC position ratio stands at 0.69, while OKX’s at 0.63. Overall, BTC’s ratio across all platforms is 1.015.

Why This Matters

The Open Interest indicator is fundamental in understanding Bitcoin’s price dynamics and the investor sentiment towards Bitcoin as a long-term investment asset.

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Tadas Klimasevskis

Tadas Klimaševskis is a Lithuanian journalist at DailyCoin, specializing in covering the lighter side of the crypto industry such as memecoins and pop culture in the metaverse. He has experience as a music artist, English language teacher, and freelance writer, and uses his creative writing skills to summarize valuable information in his work. He is also a strong believer in the potential of blockchain and spends his free time listening to music, traveling, and watching basketball games.