Binance Open Interest has reached a new high of $8.3 billion, signaling increased trading activity and potential volatility surges in the cryptocurrency market.
Bitcoin surpassed $75,000 on Wednesday and $76,000 on Thursday morning, establishing new records before settling at $74,500. Market analysts are bullish about the cryptocurrency’s future growth, buoyed by hopes of a pro-crypto position from Donald Trump’s government.
Data also indicates that severe volatility may persist in the short term, as seen by Binance’s OI.
Record Open Interest on Binance
Binance’s open interest (OI) hit a new all-time high of $8.3 billion in the last 24 hours. CryptoQuant’s newest study shows a 10.24% increase. Binance currently accounts for almost 35% of the entire $23.3 billion in open interest across all exchanges.
This high spike in OI suggests that market volatility may escalate, since substantial swings in open interest, particularly those more than 3% within 24 hours, are sometimes precursors to futures market liquidations. Open interest is the total number of outstanding long and short positions in the market, and a jump like this suggests that both positions may be under pressure as volatility rises.
“Remember that the OI statistic measures the total number of open long and short positions in the market. Sharp increases in OI indicate that when volatility rises, both long and short positions may encounter heightened pressure, potentially leading to liquidation.”
The cryptocurrency market is riding high on Trump’s unexpected return, with multiple signs indicating heightened optimism. The Coinbase Premium Index has increased, indicating potential growth in Bitcoin demand in the US. On November 6th, 11 new whale wallets withdrew $132 million worth of BTC from Binance in a single hour.
Bitcoin Bulls Need This Move to Fend Off Pullback
Crypto expert Ali Martinez has given a cautious letter for Bitcoin investors. The TD Sequential indicator just flashed a sell signal on Bitcoin’s 4-hour chart, signaling a possible decline to $72,000. According to Martinez, the presence of this signal suggests that Bitcoin’s recent surge may see a temporary reverse, and latecomers to the bull market should proceed with care.
However, the expert stated that the crucial mark to monitor is around $75,400. If BTC remains above this level, the present bearish scenario will be invalidated, perhaps paving the way for an upsurge to $78,000.
Read more: U.S. Eyes Bitcoin Reserves After Trump’s Election Win
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