Bitcoin Futures Open Interest Nears 2021 All-Time High

• Bitcoin futures open interest on CME is reported to have hit a different level as it is only $200 million shy of its late October 2021 all-time high. 

• While many analysts and experts attribute this run to the potential spot Bitcoin ETF approval and the upcoming Bitcoin halving event, analyst Tony Sycamore looks beyond. 

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The meteoric rise of the Bitcoin (BTC) price is currently accompanied by a rising interest in the asset’s Futures Open Interest according to the latest report. This creates a lot of similarities between the current cycle and the 2021 metrics. On the Chicago Mercantile Exchange (CME), Bitcoin futures open interest has reached $5.2 billion, just $200 million away from hitting the 2021 all-time high.

This incredible surge comes in just 30 days from the previous value of $3.63 billion. CoinGlass data discloses that the Bitcoin futures open interest surged from $1.46 billion to $5.45 billion on CME from October 1 to October 21, 2021. This incredible surge in the futures open interest coincided with the astronomic rise of the BTC price from $45,000 to $66,000. 

Currently, BTC is trading at $44,254.85 after surging by 6 percent in the last 24 hours. With a bullish score of 100/100, the asset has recorded a three-month price gain of 71 percent, adding $18,520.80 to its previous price. BTC currently has a market cap of $865,058,416,048 and has surged by 16 percent in the last seven days. 

Analyst Speaks on Driver’s of Bitcoin Rising Interest

Commenting on this, IG Australia analyst Tony Sycamore explains that the uptick in open interest indicates a renewed interest in Bitcoin. However, it does not provide enough information to explain how the CME traders are positioned. According to him, CME’s report may be published on December 12, and until then, investors would not know how players are positioned.

He also referred to the CME’s report to the United States Commodities Futures Trading Commission (CFTC) on November 28, indicating how players were positioned net short at that time. At that time, the short positions were around 20,724 while the long positions were 18,979.

What we can’t see right now is whether the big players have gone from a net short to a net long. If we saw the market getting extremely long, you’d be very worried about a snapback. The market that we could see last week was short, so I don’t think we’re at that point yet.

The current market rally has been linked to the upcoming Bitcoin halving event and the possible approval of the spot Bitcoin Exchange-Traded Fund. To Sycamore, the drivers of the current uptick go beyond these factors. According to him, the current run can largely be attributed to the relationship between crypto and the macro environment. In this case, the recent report that the Federal Reserve could be cutting more interest rates could be the principal driver of the price. 

I think there’s got to be more driving this now. It’s not just the ETF or halving speculation anymore. This is starting to take on a life of its own.

For now, traditional financial institutions are reportedly showing more interest in Bitcoin as CME overtook Binance in Bitcoin futures open interest in November.  The current rally cut across the broad market as Ethereum, Cardano, Solana, etc look forward to setting new all-time-high price records. 

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