Bitcoin’s open interest has hit a new record, reaching $19.8 billion, according to data from CryptoQuant. This is the highest level ever recorded for Bitcoin open interest.
Funding Rates Reach Highest Positive Level Since August
Open interest means the value of contracts that is outstanding in the derivatives segment. This reveals how much money is put in Bitcoin futures and options. The recent increase shows that more and more traders and investors are becoming interested in Bitcoin.
In addition, funding rates have also gained the highest positive level in the August period. Funding rates are the price of being long on Bitcoin futures. When funding rates are positive it means that more traders are holding long positions which are positions that assume the price of Bitcoin will increase. This means that the majority of the open interest is anchored on the upward expectation of the Bitcoin price.
The fact that the funding rates have also been on the rise over the same period shows that the liquidity in the Bitcoin market is improving. Liquidity is the level of activity in a market; the more liquid a market is the more opportunities are available for traders. It also reveals that there are more people focusing on Bitcoin because more people are investing in the market.
Bitcoin Market Sentiment Turns Positive with Higher Funding Rates
The increasing funding rates also provide an optimistic perspective for Bitcoin. This means that the traders are bullish in regards to the Bitcoin price prediction. Most people are expecting Bitcoin to increase its value further.
Overall, these developments, reported by CryptoQuant, represent advancement of a fundamentally bullish sentiment in cryptocurrencies. Open interest and funding rates are becoming larger indicating that more traders are expecting Bitcoin’s price to continue to rise, encouraging transactions in the derivatives market.
Source: https://blockchainreporter.net/bitcoin-open-interest-reaches-new-all-time-high-surpassing-19-billion/