The dollar value tied up in the number of open bitcoin (BTC) futures contracts is rising, indicating increased speculative interest in the market and potential for price volatility.
Data from CoinGlass shows that the par value of outstanding interest has reached an annual high of $12 billion, up 7% for the month.
An increase in outstanding interest means new money is flowing into the market, but it doesn’t say much about whether traders are positioning themselves for price gains or price losses.
In the case of bitcoin, the new money appears to be betting on price gains as the funding rate or cost of holding bullish long/bearish short positions has turned green after spending most of the early parts of the trading day in Asia in the to have been red.
Positive funding rates usually indicate an upward trend as long positions offset short positions; conversely, negative funding rates indicate bearish sentiment as short positions are paid by those who hold long positions.
A Taipei-based trader at Quantrend Technology, a major market maker on Binance, told CoinDesk in a note that bitcoin has reached its highest level since Luna’s collapse last year, which is also a positive psychological indicator that market sentiment is bullish.
The all-time record for open interest on bitcoin futures is from April 15, 2021, when it reached $23.8 billion across all platforms. This is followed by $23 billion on November 10, 2021, marking the end of the bull market.
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