by Bitcoin Surges Towards $70,000 Amid Soaring Open Interest
On Monday, Bitcoin (BTC) approached the significant milestone of $70,000, fueled by a growing sense of bullish sentiment among cryptocurrency traders in anticipation of the upcoming U.S. elections. According to CoinDesk, BTC recorded a 1.5% increase in value over the past 24 hours, showing steady growth throughout Sunday.
Record Open Interest Signals New Money Flowing into Bitcoin Futures
The notional open interest on USD-denominated Bitcoin futures across all major exchanges surpassed $40.63 billion over the weekend, marking a historic high. This surge in open interest, which now stands at approximately 592,000 BTC, is the highest level seen since December 2022, when Bitcoin was trading below $20,000 amidst peak bearish sentiment.
Cash-margin open interest reached an all-time high last week, with futures on the Chicago Mercantile Exchange (CME) constituting 40% of the total, exceeding $11 billion. Open interest is a crucial metric that refers to unsettled futures bets and serves as an indicator of new capital entering the market. An increase in both BTC prices and open interest signals a confirmed upward trend.
Market Analysts Weigh in on Bitcoin’s Bullish Momentum
“The recent break of $68,000 was accompanied by approximately $2.4 billion in new BTC inflows over the past six sessions, along with a corresponding spike in Bitcoin futures open interest. This is a constructive indicator for new long positions being established,” stated Augustine Fan, head of insights at the crypto wealth management firm SOFA, in a Telegram message to CoinDesk.
Additionally, a crucial open interest-based ratio tracked by CryptoQuant showed a sudden increase from 0.20 to 0.21 as Bitcoin’s price climbed by $2,000. This uptick suggests that more traders are making leveraged bets on the asset, which can indicate increased risk tolerance and may lead to greater market volatility and higher liquidations in the upcoming weeks.
Broader Cryptocurrency Market Reacts to Bitcoin’s Surge
As Bitcoin’s price surged, other cryptocurrencies followed suit. Solana’s SOL saw a rise of over 7%, driven by a speculative frenzy of memecoins returning to the network, now with an artificial intelligence theme. Other notable cryptocurrencies like Ether (ETH), Cardano’s ADA, BNB Chain (BNB), and XRP experienced increases of up to 4%. Major memecoins such as Dogecoin (DOGE) and Shiba Inu (SHIB) added 3% to their values.
ApeCoin’s APE led the market growth among mid-cap cryptocurrencies, posting a remarkable 21% jump in the past 24 hours, buoyed by the launch of its native blockchain network, ApeChain. Traders are optimistic that APE could see increased usage as tokens are issued on the new network, although the sustainability of this growth remains to be seen.
Anticipation Builds for Upcoming U.S. Presidential Elections
All eyes are on the U.S. presidential elections scheduled for November 5, with traders anticipating a potential price run-up in the days leading to the event. As of Monday morning, Polymarket bettors have placed odds at 60% for Republican Donald Trump and 39% for Democrat Kamala Harris.
“With the focus on the U.S. election results being front and center, the most positive outcome for cryptocurrency markets would be a Trump win alongside a Republican sweep of both the House and Senate. This could allow for the Trump/Vance endorsed digital asset reform plans to have a realistic chance of passing through Congress,” Fan added.
Global Economic Factors Influence Bitcoin’s Rally
Traders from Singapore-based QCP Capital noted that macroeconomic factors in Japan and China, combined with the U.S. elections, are likely to drive Bitcoin prices higher. “In Japan, inflation remains weak, with headline inflation at 2.5%, down from 3.0%. Market expectations suggest that the Bank of Japan is unlikely to raise interest rates soon, contributing to a rally in USD/JPY, which is currently below 150,” the QCP traders remarked in a weekend broadcast.
“Meanwhile, China has cut its benchmark lending rates after the central bank lowered interest rates at the end of September, as part of measures aimed at reviving economic growth and preventing a housing market collapse,” they added. “With U.S. equities nearing all-time highs and the Japanese yen on a new weakening trend, risk-on sentiment is likely to strengthen as we approach the U.S. election. This will propel risk assets higher and support our ‘Uptober’ narrative,” they concluded, referring to Bitcoin’s historically bullish performance in October.
Conclusion: What Lies Ahead for Bitcoin and Cryptocurrency
As Bitcoin moves closer to the $70,000 mark, the market is experiencing unprecedented open interest levels and bullish sentiment. With the U.S. elections on the horizon and global economic factors at play, traders are optimistic about potential price increases. However, increased leverage and market volatility could pose risks. Investors should remain vigilant and informed as they navigate these exciting yet unpredictable times in the cryptocurrency landscape.
For those looking to invest in Bitcoin or other cryptocurrencies, it’s essential to explore your options and understand the processes involved. Check out our guides on how to buy Bitcoin, how to buy cryptocurrency, or dive deeper into XRP for more insights.
