Increased Optimism Prevails with Bitcoin Open Interest Establishing a New High Record
Bitcoin's market sentiment shows a bullish trend as shown by a surge in open interest in futures contracts tied to the digital currency. According to market analyst Greg Magadini, director of derivatives at digital asset data provider Amberdata, this surge occurred when Bitcoin prices were on an upward trend, indicating a positive outlook for the digital currency.
Magadini also noted that the overall crypto market has been exhibiting strength recently, with futures contracts reaching new records. The open interest in these derivatives contracts has reached an all-time high as shown in the chart below:
Magadini further commented on the upcoming expiration of billions of dollars' worth of bitcoin options on May 30, stating that option market-makers sold Bitcoin at the $110,000 all-time-high level, which could explain the recent stalling of prices at this level. However, peak gamma for Bitcoin currently stands around $121,000, suggesting that some more upside could be found for the digital currency though a strong catalyst may be needed for a sharp increase.
Paul Howard, senior director at crypto trading firm Wincent, also weighed in on the subject. He noted that Bitcoin's volatility has remained at near-historic lows but could soon climb to the 45 level due to the upcoming options expiry. The price gap below the $90,000 mark has been filled, reinforcing the bullish case for continued upward momentum in the coming months.
Howard further explained that as we move into the summer period in the Northern Hemisphere, the market liquidity typically thins, contributing to more pronounced price swings. However, downside moves below $100,000 are less probable, and significant call options held by traders suggest a further upward trajectory for Bitcoin's price.
Based on the digital asset's market history, it is expected that Bitcoin could advance beyond the $110,000 level, even though there are risks associated with market sentiment changes and lack of strong catalysts. Traders should monitor both technical indicators and market sentiment closely to make informed decisions.
Technical indicators like the formation of a bullish cross suggest potential for increased price action. Meanwhile, the open interest in futures contracts indicates a more active market with potential for both gains and losses, depending on whether sentiment changes support or challenge the upward momentum.
- The rise in open interest for bitcoin futures contracts, a digital asset, indicates an active market in finance and technology, with investing in cryptocurrency and digital currency becoming increasingly popular.
- As Bitcoin prices continue to surge, the upcoming options expiry on May 30 may cause volatility, possibly pushing the digital currency's price beyond the $110,000 level, according to market analyst Greg Magadini.
