Bitcoin price rally likely to continue with open-interest hitting five-month peak
|- Bitcoin open interest on top crypto derivatives exchanges climbed to $9.7 billion, hitting the highest level since FTX exchange collapse in 2022.
- A surge in open interest at a time when BTC price climbed above $30,000 is considered a bullish sign for the asset.
- Experts note that Bitcoin price needs strong bid side support to absorb selling pressure in the coming weeks to sustain BTC’s recent gains.
Bitcoin open interest across derivatives exchanges climbed above the $9.7 billion level based on data from crypto intelligence firm Coinalyze. Rising open interest coupled with the recent rally in the asset’s price indicates that the asset’s gains are likely sustainable.
Also read: Bitcoin price rallies to $30,000: China is likely warming up to BTC, here’s what to expect
Bitcoin price crosses $30,000 with massive spike in open interest
Open Interest in Bitcoin hit a five-month peak, moving past $9.7 billion for the first time since the FTX exchange collapse. On derivatives exchanges, Open Interest is the total number of outstanding derivatives contracts, options or futures that have not been settled yet. Analysts keep track of all open positions in an asset through this metric.
Interestingly, Bitcoin price climbed past a key psychological level, $30,000 alongside the spike in Open Interest. This supports the bullish theory for the asset’s price.
Bitcoin Open Interest across derivatives exchanges
Of the $9.7 billion in BTC OI, $9 billion is from Perpetual contracts and $720.3 million from Futures.
Bitcoin’s explosive move ahead of a key US data release raised questions on the sustainability of the asset’s price rally. Analysts identified what the asset needs to sustain its recent gains and make strides in a bull market.
What does Bitcoin price need to sustain its gains and climb higher
Crypto analysts at the YouTube channel DataDash identified the range between $28,000 to $32,000 as a key price range for Bitcoin. BTC’s run up to $30,000 places the asset in this range.
Experts believe between $28,000 and $32,000 Bitcoin is in a range of contestment and chop and needs adequate bid side support to absorb selling pressure and the market order flow, allowing the asset to kick-off another bull market.
BTC market cap dominance
The analyst argues that the most useful indicator to ascertain whether Bitcoin price will sustain its uptrend is the Market Cap Dominance indicator. The macroeconomic outlook and the shifting sentiment among holders is key to Bitcoin’s performance and whether the asset breaks past resistance at 48.90% on the chart above.
The expert’s opinion is that the upcoming US data release and the shifting macroeconomic outlook could influence Bitcoin’s dominance and likewise its price rally. BTC has rallied past the $30,000 level in a macro risk-on environment, the largest asset by market capitalization could therefore continue its uptrend in the short-term.
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