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bitcoin

Bitcoin Open Interest Approaches Key Breakout Zone Seen In Prior Bull Markets – Details

Ash Tiwari
by Ash Tiwari
1 month ago
·
Posted in Bitcoin News
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

According to a recent CryptoQuant Quicktake post by contributor Avocado_onchain, Bitcoin (BTC) may be primed for an extended rally. The top cryptocurrency’s open interest in the futures market is approaching historically high levels – a trend seen during previous bull markets.

Bitcoin Open Interest Continues To Climb

As BTC edges closer to the $100,000 mark, open interest in the futures market is rising rapidly. A chart shared by Avocado_onchain illustrates that the current spike in open interest mirrors patterns observed in earlier bull cycles.

cq1
Bitcoin open interest is climbing towards its previous peak | Source: CryptoQuant

The analyst noted that in past instances when Bitcoin’s open interest broke above a previous peak – highlighted in red – it was quickly followed by a significant price surge, as shown by the yellow arrows and green circles on the chart.

Related Reading: Fewer Bitcoin Sellers? Exchange Depositing Addresses Plunge To 8-Year Low In Bullish Sign

Although the current level of open interest has not yet surpassed the previous high, the steep upward trajectory suggests it may soon do so. If this level is breached, there is a strong likelihood that BTC’s price could follow suit and break past its current all-time high (ATH).

Funding Rates Remain Largely Stable

Despite the optimistic outlook, Avocado_onchain cautioned that excessive open interest can create an over-leveraged environment, heightening the risk of liquidation events and volatility. However, BTC funding rates remain largely stable for now.

Related Reading: Bitcoin Headed To $135,000? Analyst Uses Fibonacci Extension To Make the Case

For the uninitiated, funding rates are periodic payments between long and short traders in perpetual futures contracts, meant to keep contract prices aligned with the spot market. In BTC’s context, positive funding rates indicate more demand for longs, while negative rates suggest more demand for shorts. 

Currently, overall funding rates across futures exchanges show a slight long bias without reaching overheated levels. Interestingly, Binance – the largest crypto exchange by trading volume – shows a short bias dominance, helping to maintain market equilibrium.

Crypto analyst Ali Martinez echoed this sentiment. In a recent post on X, he noted that 63.76% of traders on Binance are currently positioned short. This reinforces the idea that the current rise in open interest reflects healthy long positioning rather than speculative excess.

Additionally, Bitcoin’s renewed upward momentum has sparked bullish signals in key on-chain indicators. The MVRV ratio, a metric often used to assess market sentiment, has started to climb – another sign of growing investor confidence. 

Similarly, the Bitcoin SOTT indicator recently flashed green, a signal that has historically preceded major rallies. At press time, BTC trades at $97,569, up 0.5% in the past 24 hours.

bitcoin
BTC trades at $97,569 on the daily chart | Source: BTCUSDT on TradingView.com
Featured Image from Unsplash.com, charts from CryptoQuant and TradingView.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
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Ash Tiwari

Ash Tiwari

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Ash is a seasoned freelance editor and writer with extensive experience in the blockchain and cryptocurrency industry. Over the course of his career, he has contributed to major publications, playing a key role in shaping informative, timely content related to decentralized finance (DeFi), cryptocurrency trends, and blockchain innovation. His ability to break down complex topics has allowed both seasoned professionals and newcomers to the industry to benefit from his work. Beyond these specific roles, Ash's writing expertise spans a wide array of content, including news updates, long-form analysis, and thought leadership pieces. He has helped multiple platforms maintain high editorial standards, ensuring that articles not only inform but also engage readers through clarity and in-depth research. His work reflects a deep understanding of the rapidly evolving blockchain ecosystem, making him a valuable contributor in a field where staying current is essential. In addition to his writing work, Ash has developed a strong skill set in managing content teams. He has led diverse groups of writers and researchers, overseeing the editorial process from topic selection, approval, editing, to final publication. His leadership ensured that content production was timely, accurate, and aligned with the strategic goals of the platforms he worked with. This has not only strengthened his expertise in content strategy but also honed his project management and team coordination skills. Ash's ability to combine technical expertise with editorial oversight is further bolstered by his knowledge of blockchain analysis tools such as Etherscan, Dune Analytics, and Santiment. These tools have provided him with the data necessary to create well-researched, insightful articles that offer deeper market perspectives. Whether it’s tracking the movement of digital assets or analyzing blockchain transactions, his analytical approach adds value to the content he produces, ensuring readers receive accurate and actionable information. In the realm of content creation, Ash is not limited to just cryptocurrency markets. He has demonstrated versatility in covering other emerging technologies, market trends, and digital transformation across various industries. His in-depth research, coupled with a sharp editorial eye, has made him a sought-after professional in the freelance writing community. From developing editorial calendars to managing content delivery schedules, he has honed a meticulous approach to project management that ensures timely, high-quality work delivery. Throughout his freelance career, Ash has consistently focused on improving audience engagement through well-researched, insightful, and relevant content. His ability to adapt to the evolving needs of clients, whether it's enhancing the visibility of digital platforms or producing thought-provoking pieces for a wide range of audiences, sets him apart as a dynamic force in the field of digital content creation. His contributions have helped to shape a well-rounded portfolio that showcases his versatility, technical expertise, and dedication to elevating the standards of journalism in blockchain and related sectors.

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