Bitcoin futures open interest reaches $ 3.5 billion – is the upward trend continuing?
Bitcoin and the wider cryptocurrency markets surprised when the market capitalization of the leading cryptos suddenly increased. At the 14. January started the market at 217, $ 5 billion, today this number is over 234 Billion dollars.
The increased market volatility appears to have drawn other traders into the market. For example, open interest in Bitcoin futures has risen to $ 3.5 billion.
Does the increasing open interest indicate more upward movement in Bitcoin?
In addition to buying pressure, interest in Bitcoin futures also increased. The crypto analysis company Skew highlighted the increase in open interest on all exchanges that offer Bitcoin derivatives.
The open interest refers to the total number of outstanding or outstanding contracts. The open interest increases with the creation of new contracts and decreases with the execution. There is a much clearer picture of the amount of money actually entering or leaving a market than the trading volume.
Global open Interest ticked up 15% to $ 3.5bln pic.twitter.com/4a4i9wlyY0
– skew (@skewdotcom) 15. January 2020
Are there any more winnings?
Although this is not just an indicator of price direction, traders often use open interest to determine the strength of a trend. Rising open interest at a time when the market is trending up often signals a continuation of the rally.
The following graphic illustrates what traders can read from the open interest figures. If the price, volume and open interest combined increase, the price of Bitcoin will likely continue to be boosted. A decline in volume and open interest with rising prices is a sign of a weakening of the rally and a possible turnaround.
– Murad Mahmudov 🚀 (@MustStopMurad) 12. January 2020
In a similar way as Skew’s tweet from yesterday, the daily volume of Bitcoin futures is increasing. Bitcoin could therefore continue to point upwards, although the price is currently initiating a correction.
Proof of text: newsbtc