Bitcoin open interest matches record high amid predictions of BTC price ‘fireworks’ this month

Bitcoin
(BTC)
is
in
line
for
“explosive”
price
action
as
derivatives
markets
return
to
form
in
2022,
a
new
forecast
states.

In
a
tweet
on
Jan.
4,
Vetle
Lunde,
an
analyst
at
Arcane
Research,

confirmed

that
BTC
denominated
open
interest
(OI)
had
returned
to
all-time
highs
seen
in
November.

Open
interest
demands
“fireworks”
within
weeks

Bitcoin
futures
and
options
have
taken
a
beating
during
the
end-of-year
BTC/USD
retracement,
but
as
the
holiday
period
ended,
consensus
began
to
form
around
a
major
comeback.

Institutional
traders
should
become
the
major
force
on
Bitcoin
markets,
some
say,
and
derivatives
are
already
showing
signs
of
that
renewed
interest.

OI
is
now
back
at
the
levels
it
last
hit
in
week
three
of
November
when
BTC/USD
itself
reached
all-time
highs
of
$69,000.

Unlike
then,
however,
funding
rates
are
currently
neutral

a
key
foundation
for
forming
a
volatile
move.

“BTC
denominated
open
interest
in
BTC
perpetuals
surpassed
November
highs
today
with
the
leverage
accumulating
on
neutral
to
slightly
below
neutral
funding
rates.
Seems
explosive
tbh,”
Lunde
commented.


BTC
OI
vs.
Binance
funding
rate
annotated
chart.
Source:
Vetle
Lunde/
Twitter

Lunde
is
not
alone.
In
a
separate
post
on
Jan
3.,
Filbfilb,
co-founder
of
trading
platform
Decentrader,
likewise
noted
the
encouraging
state
OI
activity.

“OI
very
high
relative
to
Market
Cap…
doubt
we
see
it
going
beyond
the
final
week
of
this
month
without
fireworks,”
he

wrote
.

Ethereum
hits
first
high
of
2022

Data
from

Cointelegraph
Markets
Pro

and

TradingView
 showed
BTC/USD
trading
near
$47,380
at
the
time
of
writing
Dec.
4,
meanwhile,
recovering
from
a
dip
that
took
the
pair
to
two-week
lows.



Related: Bitcoin
exchange
balances
trend
back
to
historic
lows
as
BTC
withdrawals
resume
in
January

While
analysts
were
broadly
calm
about
the
action
on
short
timeframes,
it
was
altcoins
still

forming

the
main
point
of
interest.

“The
point
of
maximum
financial
opportunity
for
altcoins
is
still
now,”
Cointelegraph
contributor
Michaël
van
de
Poppe

argued
,
reiterating
previous
convictions
about
the

opportunities
presented
by
alt
markets
.


BTC/USD
1-hour
candle
chart
(Bitstamp).
Source:
TradingView

Ether
(ETH),
the
largest
altcoin
by
market
cap,
reached
$3,879
on
the
day,
its
best
performance
of
2022
so
far.


ETH/USD
1-hour
candle
chart
(Bitstamp).
Source:
TradingView

read original article here