Bitcoin Futures Open Interest (OI) has hit a record high for crypto derivative exchanges, as traders are increasingly optimistic that cryptocurrencies will reach new historical highs.
On May 23rd, open interest for Bitcoin (BTC) futures rose to just over $80 billion, according to Coinglass. Since their introduction in May, derivate speculators have ramped up their activity by 30%, looking to leverage in anticipation of upward price movements for Bitcoin.
Open interest refers to the total number of active futures contracts that traders can bet on in terms of future Bitcoin prices. This indicates the current level of market speculation.
The increase in OI suggests that many traders are building large, leveraged positions, indicating they are using borrowed funds. When Bitcoin prices shift against these leveraged bets, traders may be compelled to liquidate, which could create considerable selling pressure and, consequently, lead to rapid price fluctuations.
However, analysts point to a surge in inflows into the Spot Bitcoin Exchange Trading Fund (ETF), which has surpassed $2.5 billion this week, as a possible counterbalance to this increased leverage.
The Bitcoin Options market reflects a similar trend, with open interest exceeding $1.5 billion at strike prices of $110,000 and $120,000 on the Delibit exchange. There’s also over $1 billion in OI at strike prices of $195,000, $125,000, and $130,000.
An expected value contract worth around $27.6 billion is set to expire on May 23rd, with a PUT/call ratio of 1.2%. This indicates there are more short (PUT) sellers compared to long (call) buyers, with a maximum price point expected to hit $103,000, according to Delibit.
Bitcoin is below $111,000
In the meantime, Bitcoin has lost some of its recent gains, briefly dropping below $111,000 on Coinbase, according to TradingView.
So far this year, the asset has risen nearly 20% and almost 50% since it fell to $75,000 on April 7th following global tariff announcements by former President Donald Trump.
Bitcoin reached an all-time high of $112,000 on May 22, nearly going over $111,000 again in the subsequent 24 hours, but it slipped back below that mark at 4:15 AM on May 23.
