As a seasoned researcher who has witnessed the cryptocurrency market’s rollercoaster ride for years now, I can’t help but feel a mix of excitement and apprehension when I see the record-high open interest on Bitcoin derivatives. With BTC hovering around $70,000, it’s hard not to be drawn in by the potential profits, but my past experiences have taught me that this market is as unpredictable as a coin toss.
The level of ongoing contracts for Bitcoin derivative products has hit an all-time peak, with Bitcoin approaching the $70,000 mark on October 21st.
On October 21st, as per a post by CoinGlass, the Open Interest (OI) on Bitcoin futures contracts surpassed its previous peak, standing at an all-time high of approximately $40.5 billion.
The open interest refers to the current number or worth of Bitcoin futures agreements that haven’t been settled yet. It serves as a gauge for the level of investment in Bitcoin derivative products, where a larger open interest could signal increased potential for leverage and market fluctuations.
On the derivatives market, CME held approximately 30.7% of the overall Open Interest (OI), making it the leading player. Binance came in second with a 20.4% share, and Bybit took third place with about 15% of the total.
In periods of increased Open Interest (OI), sudden price changes might initiate a chain reaction of forced sell-offs, often referred to as “liquidations.” This could lead to intense selling in the spot market, causing rapid drops in Bitcoin’s price, which are sometimes called “price collapses” or “market corrections.
The previous significant price drop happened towards the beginning of August, where Bitcoin’s value decreased nearly 20% (approximately $12,000) within just a couple of days, dipping below $50,000.
Currently, the value of this asset is soaring, peaking at around $69,380 during early trades on October 21st, as reported by TradingView. Yet, it encountered resistance and subsequently retreated, trading at approximately $69,033 when last published.
6.4% lower than its peak record of $73,738, as shown by CoinGecko.
October 20th saw CryptoMoon predicting that should Bitcoin surpass the $70,000 mark, it might trigger a surge in altcoins like Ether (ETH) and Solana (SOL).
At present, both Ether and Solana are outdoing Bitcoin in daily returns. Ether rose by approximately 3.5%, reaching over $2,750 at the start of October 21st trading, while Solana saw a gain of around 6% and nearly touched $170. However, both assets have experienced a slight decline since then.
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2024-10-21 08:13