Bitcoin Open Interest Surges to $19 Billion as Traders Rekindle InterestDespite a recent liquidation of $2.5 billion worth of futures contracts, leading to a reduction in positions for some traders, Bitcoin's open interest has seen a significant surge, now exceeding $19 billion
Bitcoin Open Interest Surges to $19 Billion as Traders Rekindle Interest
Despite a recent liquidation of $2.5 billion worth of futures contracts, leading to a reduction in positions for some traders, Bitcoin's open interest has seen a significant surge, now exceeding $19 billion. This trend suggests traders' interest in Bitcoin remains strong despite market volatility.
Impact of Futures Liquidation on Markets
According to Glassnode, futures open interest worth approximately $2.5 billion was liquidated as Bitcoin prices climbed towards $63,400. This might have been a contributing factor to some short sellers exiting the market. However, the percentage decline in open interest across the top three perpetual contract exchanges remains below 5%, indicating the liquidation did not severely impact the market.
This phenomenon showcases the resilience of the Bitcoin market, withstanding pressures from leveraged traders even amidst intense fluctuations. Historically, the total leveraged trading cost per week reached $120 million when Bitcoin hit an all-time high in March 2021. However, this figure has dropped to $15.3 million in recent weeks, implying a decrease in speculative and bullish trading activities as the market enters a range-bound phase.
Traders Repositioning
Despite the recent massive futures liquidation, traders have not been deterred and are actively opening new positions. CryptoQuant data shows that Bitcoin's open interest stood at around $17.5 billion on October 10th and surged to over $19 billion by October 12th. Although it has dipped slightly since then, open interest remains robust at above $18 billion.
The rekindled interest among traders in Bitcoin is mainly fueled by recent price gains. Bitcoin's breakout above the $63,000 mark has lured more traders into the market, hoping to capitalize on further price advancements.
Price Facing Test
Bitcoin prices experienced a 3% rise on October 11th, hitting $62,500 and breaching the crucial resistance level of the 50-day moving average. However, Bitcoin currently faces a stronger resistance at the 200-day moving average, hovering around $63,400.
Although recent price rallies pushed Bitcoin closer to $63,100, it failed to break through this critical level. As of this writing, Bitcoin has experienced a small decline to $62,700, representing a 1% drop.
Looking Ahead
Despite recent market volatility with billions of dollars worth of futures open interest being liquidated, Bitcoin's open interest remains strong. Recent price surges to $63,000 reflect growing optimism among traders, but they still face the challenge of a formidable resistance around $63,400.
The next few days will determine whether Bitcoin can break through this barrier or continue to face this crucial price point.
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