Bitcoin Bullish Signal: Open Interest Shows Strong Trend Up

After heavily decreasing during the 4th December crash, the open interest finally seems to be making a return as it gains strong upwards trend. Bitcoin Open Interest Shows Strong Upwards Movement As pointed out by a CryptoQuant post, the BTC open interest has reversed its trend, and is now showing sharp movement up. The “open interest” is an indicator that measures the total amount of futures contracts still open at the end of any trading day on derivatives exchanges. The metric takes into account both long and short positions. When the value of this indicator moves up, it can mean market volatility is rising. An increasing open interest may also support the current overall price trend. However, very large values of the metric can imply there is an excess of leverage in the market, which may end up leading to a correction in the price of the crypto. On the other hand, a decreasing open interest value can result in lower market volatility. When the indicator sharply moves down, it can lead to a short or long squeeze due to the sudden price movement (the reverse can also be the case). Related Reading | Bitcoin Whale Address Containing $11 Million Activates After 9-Year Dormancy Now, here is a chart that shows the trend in the Bitcoin open interest over the past month: Looks like the indicator has started moving up recently | Source: CryptoQuant As you can see in the above graph, during the 4th Dec crash, th...