Notwithstanding its downswing which happened days before its block reward halving, Bitcoin bulls, however, gained the upper hand pushing the cryptocurrency as high as $10,000 days after the 2020 halving event.
Halving which happens every four years saw BTC reward halved from 12.5 to 6.25 BTC.
BTC/USD Daily Chart
Analysts have opined that determining Bitcoin’s mid-term trend will be a herculean task until it breaches the $10,000 key resistance level or falls below its support of $8,200.
Bitcoin Open interest connotes the value of outstanding futures contracts yet to be settled. It has been inferred that growth in open interest indicates that influx of funds into the market and that traders are anticipating a short-term volatility increase.
Most allude Bitcoin’s underlying volatility could be attributed to the existence of numerous high-leveraged positions in the crypto market, which results in a dramatic price increase of the asset. The open interest gives a clue towards the presence of a highly leveraged position.
Image Courtesy of Arcane Research
However Open interest recorded on BitMEX and other margin trading platforms in comparison with that seen on the futures market have differed greatly. Skew recently indicated CME Bitcoin options Open interest rose by 10 times its previous value this month.
Analysts have taken the differential between the Open interest as an indicator that traders are keen on gaining exposure to BTC long-term price activity rather than trying to profit from short-term price trends.
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