Rising Open Interest
Bitcoin’s open interest has been soaring as the price has climbed steadily. This surge reflects the growing interest in crypto since the SEC approved Spot Bitcoin ETFs. The open interest has now reached its highest level since November 2021, when Bitcoin hit its all-time high of $69,000.
Historical Levels
Data shows that the open interest has exceeded $24 billion, a 50% increase since the start of 2024. This level of open interest was last seen in November 2021, when Bitcoin reached its peak.
Greed Levels Rising
The open interest surge has coincided with rising greed levels among crypto investors. The Crypto Fear & Greed Index indicates that investors are taking more risks than usual.
Implications for Bitcoin Price
Historically, high open interest has often led to market crashes. In 2021, when the open interest reached similar levels, the Bitcoin price plummeted from $69,000 to $46,000 within a month.
Potential Crash
If history repeats itself, Bitcoin could face a significant crash. A similar decline would see it fall back to around $41,000.
Market Factors
However, the current market differs from 2021. Spot Bitcoin ETF issuers are experiencing high demand for their products. If large institutions continue to buy Bitcoin to meet customer demand, the price could continue to rise.
