The crypto market could be up for a Bitcoin rally as the digital asset’s open interest hit an all-time high of $19.8 billion. The cryptocurrency is surging towards the $100,000 mark as Bitcoin prices reached $67,500 today. This rise in open interest along with increased price action and positive funding rates has caught the attention of crypto analysts and traders.
Bitcoin’s open interest is a key indicator that liquidity and market sentiment has reached unprecedented levels. Analyst EgyHash highlighted how funding rates have also hit their highest positive levels since August last week which suggests a bias towards long positions in the market. All these factors have led to speculations that Bitcoin might be poised for a significant bullish run.
Bitcoin prices are soaring in response to these positive developments as seen in the 5.1% surge in the last 24 hours, This has resulted in a market capitalization of $1.297 trillion, up from $1.175 trillion a week ago. The digital asset’s trading volume has also increased significantly, doubling from less than $20 billion to over $40 billion over the weekend.
As per crypto market analyst Trader Tardigrade, there could be a potential parabolic Bitcoin rally to $500,000 based on observations from previous cycles. However, analysts like RektCapital have asked investors to tread with caution as Bitcoin has to secure a weekly close above its current downtrend channel to confirm a sustained breakout.
In the broader context of the cryptocurrency market, this Bitcoin open interest surge is happening when digital asset investment products witnessed the largest inflow since July 2022, last week, amounting to $346 million. Most of this inflow, about 90% is for Bitcoin products.
Recently, the US Securities and Exchange Commission approved spot Bitcoin ETFs, giving institutional investors new opportunities to gain exposure to the digital asset. This increase in accessibility, along with the upcoming Bitcoin halving event has created bullish sentiments in the crypto market. Whether this translates to a $100,000 rally remains to be seen as the record open interest in Bitcoin derivatives has painted a bullish picture for investors to bank on.