Bitcoin derivatives have reached unprecedented levels, with open interest (OI) in Bitcoin futures hitting an all-time high of $40.5 billion on October 21, as per a report from CoinGlass. The data shows that the Chicago Mercantile Exchange (CME) leads the market, holding 30.7% of Bitcoin futures open interest, followed by Binance at 20.4%, and Bybit at 15%.
Bitcoin Approaches $70,000
The surge in open interest coincided with Bitcoin’s price nearing the $70,000 mark. Open interest represents the total value or number of outstanding futures contracts yet to expire and serves as a key indicator of market activity and investor engagement in Bitcoin derivatives.
A rise in OI can signal increased leverage in the market, potentially leading to greater volatility. Such conditions can trigger cascading liquidations, which may cause sharp Bitcoin price drops, as seen in August when Bitcoin prices fell by nearly 20% in two days.
On October 21, Bitcoin reached $69,380 in early trading but encountered resistance, pulling back to around $69,033. At present, Bitcoin is 6.4% shy of its all-time high of $73,738, according to CoinGecko. Altcoins such as Ether and Solana also posted gains, with Ether rising 3.5% and Solana gaining 6%.
Bitcoin Open Interest Surges Amid U.S. Election Speculation
Bitcoin’s recent price surge aligns with growing anticipation of the U.S. presidential election on November 5. Polls indicate increasing odds of former President Donald Trump winning the election, boosting both Bitcoin prices and the dollar. His proposed policies on tariffs and taxes are expected to keep U.S. interest rates elevated, weakening the currencies of key trading partners.
On Polymarket, Trump leads Vice President Kamala Harris with 61% to 38%. Market attention is shifting towards corporate earnings and potential election risks with 15 days left until the vote. Analysts, such as Chris Weston from Pepperstone and Brad Bechtel from Jefferies, suggest traders hedge risks by holding long positions in dollars against the euro, Swiss franc, and Mexican peso, driven by rising real interest rates.
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