As a seasoned crypto investor with a decade-long journey through the volatile world of digital assets, I find myself intrigued by the recent surge in Bitcoin Open Interest (OI) and its subsequent all-time high. Over the years, I’ve learned that every new peak brings a fresh wave of skepticism among newer investors, but as someone who’s seen Bitcoin plummet from $20,000 to $3,000 and rise again, I can confidently say we are not in overvalued territory yet.
As a crypto investor, I’ve witnessed an unprecedented surge in Bitcoin Open Interest (OI), reaching a record high, mirroring Bitcoin’s rally to an impressive $75,000. Several seasoned analysts are hinting that this upward trend might continue, implying even higher potential gains for us.
The value of outstanding Bitcoin derivative contracts like options and futures, as measured by the Open Interest (OI), has risen to $45.41 billion. This is a 13.29% surge since November 5, when Bitcoin’s price surpassed its previous all-time high of $73,800 set in March, based on data from CoinGlass.
The Open Interest (OI) rises when there are a greater number of newly established long or short positions by traders compared to the contracts settled on the same day.
It seems that traders are not anticipating a quick drop in Bitcoin’s price back to its previous peak of around $73,679. Currently, there is approximately $1.26 billion worth of short positions, which could be forced to close if the price were to rise instead.
As per data from TradingView, when it was published, the value of a single Bitcoin stood at approximately $75,792. Analysts are currently debating that this price level might be optimal.
According to seasoned trader Peter Brandt, who measures market cycles differently from many others, Bitcoin is currently in the ideal phase of its bull market halving cycle. This phase is projected to peak at approximately $130,000 to $150,000 around August or September next year.
Analysts suggest Bitcoin has more room to grow
Some newer cryptocurrency investors might worry that Bitcoin’s latest record highs indicate overvaluation, but not every analyst shares this viewpoint.
Crypto analyst Rajat Soni, for one, believes it’s still early:
We’re at such an early stage in the use of Bitcoin that it’s still possible to swap traditional currencies like dollars, euros, and pounds for Bitcoins. This is because a large portion of the world still believes that these traditional currencies are supported by something physical.
Echoing a similar sentiment, crypto analysis firm CryptoQuant stated that Bitcoin is “not overheated” yet.
In simpler terms, the company said on November 6 that just because Bitcoin has reached a new record price, it doesn’t necessarily mean that it is overpriced when compared to its original cost.
According to the analysis company, the Bitcoin Market Value to Realized Value (MVRV) ratio “hasn’t yet reached its maximum points.
As a researcher examining Bitcoin’s market trends, I’ve observed that a higher MVRV (Money Value Ratio of Venture) tends to suggest to traders that Bitcoin might be overbought. For instance, when Bitcoin hit its record high of $73,679 in March, based on Bitbo data, the MVRV stood approximately at 2.87. This could potentially indicate a peak in Bitcoin’s price at that time.
At the time of publication, Bitcoin’s MVRV score is 2.19.
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2024-11-07 07:05