According to data from CoinGlass, trading open interest in Bitcoin futures on the Chicago Mercantile Exchange (CME) soared to a historic peak of $7.7 billion on Tuesday, marking a substantial 15.6% surge within the preceding 24 hours.
This surge in open interest closely aligns with Bitcoin’s remarkable price ascent. BTC surged to a two-year high, reaching approximately $57,036 on Tuesday — its highest level since late 2021.
The open interest in Bitcoin futures on CME represents the total number of active futures contracts that are yet to be closed. It serves as a barometer of investor interest and engagement in trading these contracts. A high open interest indicates heightened activity and enthusiasm among traders in the market.
Just a week prior, the total value of outstanding Bitcoin futures contracts on the CME stood at $6.8 billion, underscoring the rapid increase in this metric within a short timeframe.
CME Activity Aligns with Record Spot Bitcoin ETF Trading Volume
The recent surge in trading activity on the Chicago Mercantile Exchange (CME) corresponds with significant trading volume witnessed in the spot Bitcoin ETF market, surpassing $50 billion last week, as documented by BitMEX Research. This uptick follows the approval of ETFs by the Securities and Exchange Commission (SEC), including those from BlackRock, Fidelity, and Bitwise, among others.
On Monday, these ETFs shattered the all-time daily record for trading volume, drawing approximately double their typical daily average at $2.4 billion. Notably, BlackRock’s IBIT ETF emerged as the market leader, contributing $1.3 billion to the total volume.
According to Bitrue research, the surge in CME Bitcoin Futures reflects the prevailing sentiment in the market, driven by institutional investors’ swift accumulation of the cryptocurrency.
Bitrue research noted, “The introduction of the spot Bitcoin ETF has brought about a significant shift in the adoption of BTC, extending beyond the realm of retail investors who have been supporting the price for months. The convergence of retail and institutional traders could rejuvenate Bitcoin’s open interest and potentially lead to a more pronounced price surge in the short- to mid-term.”
Rush to Accumulate Bitcoin Intensifies Ahead of Halving Event
Markus Thielen from 10X Research indicates that traders are currently scrambling to acquire Bitcoin in anticipation of the upcoming halving event in April.
“Everybody is closely monitoring the inflows into ETFs and expects these flows to continue,” Thielen shared with Cryptonews.
He further elaborated, “We’re witnessing a buildup in futures positions across both the CME and crypto native venues, accompanied by funding rates spiking above 25% on an annualized basis. Long positions are willing to pay these elevated funding rates to short positions, reflecting the bullish sentiment among traders. Historically, Bitcoin has experienced a rally of approximately +32% leading up to the halving events from the 60-day timeline, which we crossed just last week.”
Sergio S, CEO of crypto market-maker Coinrate, echoed Thielen’s observations. He highlighted that managers of large and private funds are advising their clients to acquire Bitcoin sooner rather than later, foreseeing a potential price surge following the halving event.
Multiple Factors Fuel Bitcoin’s Price Surge
The surge in Bitcoin’s price is not solely attributed to anticipation surrounding the halving event; additional factors are contributing to this upward momentum. One significant factor is MicroStrategy’s acquisition of 3,000 BTC for $155 million.
According to Alex Kuptsikevich, senior market analyst at FxPro, a series of stop orders were triggered during Tuesday’s Asian session, temporarily driving Bitcoin’s price up to $57.8K.
Kuptsikevich noted, “Nevertheless, Bitcoin encounters no significant barriers to growth towards levels just above $60K. Bitcoin could swiftly reach this threshold or approach the historical highs at $69K. However, sustained growth beyond these levels may necessitate several months of consolidation.”
These developments underscore the multifaceted nature of Bitcoin’s price surge, fueled by both institutional investments and trading dynamics within the market.
