Bitcoin open interest can often be an indication of where the price of BTC may be headed next, depending on whether the metric is rising or falling. This time around, there has been a massive increase in Bitcoin open interest, reaching a 19-month high in the process. Using historical data, it is possible to predict what this means for the price of a crypto, especially when investors remain very bullish.
Bitcoin open interest rises to $17.04 billion
In an interesting turn of events, Bitcoin open interest is increasing rapidly across various exchanges. In the last 24 hours alone, this metric increased by a cumulative 7.89% across all exchanges in the region, bringing the total open interest to 454,150 BTC, valued at $17.04 billion.
For now, most of the Bitcoin open interest is concentrated on CME, Binance and Bybit exchanges. But perhaps even more interesting is that these open interest levels mark a 19-month high.
Source: CoinGlass
According to data presented on the CoinGlass website, the last time Bitcoin open interest was this high and at this high was in March 2022, before the historic Terra Luna crash, which sent the market into a prolonged bear market.
This means that the last time Bitcoin’s open interest increased this much was when investors were still in bullish enthusiasm. Thus, the historical performance of the BTC price in relation to open interest can serve as a guide as to what may happen to the digital asset’s price going forward.
BTC price found support at $37,400. Source: BTCUSD on tradingview.com
Historical data says BTC price will rise
Similar to the current trend, Bitcoin open interest increased from approximately 38,000 BTC to over 44,000 BTC in the span of a month, and the price of BTC increased rapidly. This trend caused prices to rise from $38,700 in March 2022 to over $47,000 before the month ended.
Given this historical performance and assuming Bitcoin continues this trend, the rally may not be over yet. BTC is also priced at the same price point at $37,500 and a similar rise could bring its price to $45,000 before the end of the month.
However, there is also a possibility that open interest may peak at this level and start falling. Once this happens, the price of BTC may start to decline with the decline in open interest, just like in April 2022. A similar crash would send the price back down to $27,000.
source: www.newsbtc.com
