On-chain data shows Bitcoin futures open interest has jumped up more than $1.5 billion in just a few hours as the crypto’s price breaks past $44k again.
The Bitcoin Futures Open Interest Increases by More Than $1.5 Billon in Just A Few Hours
As pointed out by an analyst in a CryptoQuant post, the BTC open interest has shot up over the past day as the coin’s price has observed a surge.
The “open interest” is an indicator that measures the total amount of Bitcoin futures contracts currently open on all derivatives exchanges.
This metric increases in value, which means that more futures opportunities are being created on the exchanges. This can lead to greater market leverage and more volatility.
On the other hand, the open interest’s value going down suggests investors are closing up their positions as they pull out of the market. This trend can result in less volatility for Bitcoin’s price as leverage falls.
Below is a chart of the Bitcoin Open Interest Trend over the Past Month:
The indicator looks as though it has seen a significant increase in value over the last 24 hours. Source: CryptoQuant| Source: CryptoQuant
As you can see in the above graph, the BTC open interest observed a sharp rise within the last 24 hours as the coin’s price enjoyed an uptrend.
Related Reading| Ethereum Will Continue To Outperform Bitcoin, Here’s The Indicator That Says So
Within a short time, the dollar value of the metric rose to more than $1.5Billion. The total open interest has now reached $13.6B.
As the chart illustrates, the price saw an increase in two other instances, both with sharp spikes, within thirty days.
Read Related Reading: Quant Explains Why Stablecoin Ratio Gives Bitcoin Sell or Buy Signals| Quant Explains How Stablecoin Ratio Can Give Bitcoin Buy Or Sell Signals
However, prices plummeted along with open interests shortly afterwards. The current coin’s value may fall if a similar trend continues.
However, it is possible that this time things will turn out differently. There has been a sharper increase in Bitcoin open interest than any other instance.
BTC price
Yesterday, Bitcoin’s price broke past $44k for the first time since start of March. The coin is currently at $44.6k. This 10% increase in value has been seen over the past seven days.
Crypto has seen a 15% increase in its value over the last month. Below is a chart showing the change in price over the past five days.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Unsplash.com featured image, Charts from TradingView.com and CryptoQuant.com charts