16 November 2023
The Bitcoin open interest can often be an indication of where the BTC price might be headed next depending on whether or not the metric is rising or falling. This time around, the Bitcoin open interest has risen drastically, hitting 19-month highs in the process. Using historical data, it is possible to extrapolate what this means for the crypto’s price, especially as investors remain very bullish.
Bitcoin Open Interest Surges To $17.04 Billion
In an interesting turn of events, the Bitcoin open interest has been rising quickly across various exchanges. In the last 24 hours alone, this metric rose by a cumulative 7.89% across all exchanges in the space, bringing the total open interest to 454,150 BTC worth a staggering $17.04 billion.
For now, most of the Bitcoin open interest is concentrated across the CME, Binance, and ByBit exchanges. But perhaps what is even more interesting is that these open interest levels represent a 19-month high.
According to the data presented on the CoinGlass website, the last time that the Bitcoin open interest moved in this fashion and to this high was back in March 2022, before the historical Terra LUNA crash that sent the market into a prolonged bear market stretch.
This means that the last time that the Bitcoin open interest rose this much was during a time when investors were still very much in the throes of bull run euphoria. As such, the historical performance of the BTC price back then in relation to the open interest could serve as a guide to what might happen to the digital asset’s price next.
Historical Data Says BTC Price Will Surge
Similar to the current trend, the Bitcoin open interest had surged from around 38,000 BTC to over 44,000 BTC in the space of a month, and the BTC price followed quickly. This trend saw the price rise in March 2022 from $38,700 to over $47,000 before the month was over.
Going by this historical performance and assuming Bitcoin sticks to this trend, the rally may be far from over. The BTC price is also sitting at a similar price point at $37,500 and a similar surge could bring its price toward $45,000 before the month is over.
However, there is also the possibility that the open interest could peak at this level and begin to decline. Once this happens, then in the same fashion as in April 2022, the BTC price could begin to decline as the open interest drops. A similar crash would send the price back down toward $27,000.