Coin World reported:
The open interest (OI) of BTC futures contracts in the bitcoin market has soared to $40 billion, reaching its highest level since 2024. This surge indicates that BTC is at a critical stage, and market participants are preparing for potential price changes.
In addition, indicators such as funding rates and price trends provide deeper insights into the broader market sentiment and potential future trends.
Bitcoin’s price trend and the surge in open interest
Bitcoin has recently been on an upward trend. Its current trading price is $67,578, and the open interest on various exchanges has increased significantly. Since early October, supported by strong market sentiment, BTC has been in a bullish trend. The 50-day moving average, currently at $62,120, has provided solid support, pushing the price to its current level.
Technical indicators further strengthen the bullish sentiment. The relative strength index (RSI) is at 62.18, indicating that bitcoin is in a bullish phase with room for growth before becoming overbought.
The Chaikin Money Flow (CMF) is also positive at 0.12, highlighting sustained buying pressure and strong inflows into bitcoin.
According to data from Glassnode, the surge in open interest suggests that traders are opening more leveraged positions. This indicates further upward momentum or significant price changes on the horizon, as historically, the increase in open interest has been a precursor to increased volatility.
Bitcoin funding rates indicate bullish sentiment
The funding rates on various exchanges for bitcoin have consistently been positive. This indicates that traders holding long positions are paying a premium compared to traders holding short positions, further indicating a bullish market sentiment.
However, while positive funding rates indicate optimism, they also come with a warning. Prolonged high funding rates can lead to excessive leverage and increase the risk of long-term liquidation if prices suddenly adjust.
Since early October, funding rates have surged along with the price, suggesting that while the market is bullish, it may be approaching resistance levels or points of profit-taking.
OI and volatility signals
The surge in open interest and consistently positive funding rates reflect the growing optimism in the bitcoin market. However, with OI reaching $40 billion, traders should be prepared for potential volatility.
The average true range (ATR) is currently around 96.16, indicating increasing volatility that could result in significant price swings in any direction.
Bitcoin price predictions for 2024-25
If bitcoin can maintain its current trend and break through the key resistance level near $68,000, the price may soar again.
However, high OI and funding rates also suggest an impending price adjustment, especially if long positions are liquidated during a price decline.
This lays the foundation for possible restructuring, so it is crucial for traders to remain cautious in the coming days.