Bitcoin futures open interest on the Chicago Mercantile Exchange (CME) is nearing its all-time high reached in late October 2021, falling just $200 million short. While many experts attribute this surge to the potential approval of a spot Bitcoin ETF and the upcoming Bitcoin halving event, analyst Tony Sycamore believes there are other factors at play.
According to the latest report, the rise in Bitcoin’s price is accompanied by a surge in its Futures Open Interest. This parallels the metrics seen in the 2021 cycle. Currently, Bitcoin futures open interest on the CME stands at $5.2 billion, only $200 million away from the all-time high.
This impressive increase occurred within just 30 days, as the previous value was $3.63 billion. Data from CoinGlass reveals that Bitcoin futures open interest on the CME rose from $1.46 billion to $5.45 billion between October 1 and October 21, 2021. This surge coincided with Bitcoin’s price skyrocketing from $45,000 to $66,000.
At present, Bitcoin is trading at $44,254.85, having risen by 6 percent in the last 24 hours. It boasts a bullish score of 100/100 and has gained 71 percent in price over the past three months, adding $18,520.80 to its previous value. Bitcoin currently holds a market cap of $865,058,416,048 and has surged by 16 percent in the past week.
Tony Sycamore, an analyst at IG Australia, comments on the increasing open interest, stating that it signifies renewed interest in Bitcoin. However, he notes that it does not provide enough information on the positioning of CME traders. The CME’s report, which may be published on December 12, will shed light on the positions of players in the market.
Sycamore also refers to the CME’s report to the United States Commodities Futures Trading Commission (CFTC) on November 28, which indicated that players were net short at that time, with 20,724 short positions and 18,979 long positions.
The analyst points out that it is unclear whether the major players have shifted from a net short to a net long position. If the market becomes excessively long, Sycamore warns of a potential snapback. However, as the market was short last week, he believes there is no cause for concern yet.
While the current market rally has been associated with the upcoming Bitcoin halving event and the potential approval of a spot Bitcoin ETF, Sycamore believes there are other driving factors. He suggests that the relationship between cryptocurrencies and the macro environment is a significant driver, citing the recent report of the Federal Reserve potentially cutting interest rates as a principal factor influencing the price.
Sycamore concludes that there is more to the current surge than just speculation about ETFs or halving. He believes that it has taken on a life of its own.
Reportedly, traditional financial institutions are showing increasing interest in Bitcoin, with CME surpassing Binance in Bitcoin futures open interest in November.
The current rally has also impacted the broader market, with cryptocurrencies like Ethereum, Cardano, and Solana looking to set new all-time high price records.
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