CME Bitcoin futures open interest hits an 8-month high, higher than the level when the BTC price was $65,000


Bitcoin’s open interest (OI) (Bitcoin) Chicago Mercantile Exchange (CME) futures trading Towards a new historical high On Thursday, BTC recovered a five-month high of $58,550 on BitStamp.

According to data provided by ByBt.com, the total number of outstanding derivatives contracts on the CME Group Bitcoin futures market reached US$3.22 billion, only US$40 million lower than the historical high set in February 2021. Despite this, the OI is still higher than the actual level. Bitcoin price peaked in mid-April.

In detail, CME Bitcoin Futures OI On April 14, the day when the BTC price almost reached US$65,000, the figure was US$3.02 billion. But on Thursday, despite the BTC price fluctuating in the price range of US$57,000 to US$58,550, the OI was still more than 6% higher than the reading in mid-April.

CME Bitcoin futures open positions. Source: ByBt.com

Traders often use OI as an indicator to confirm the trend In the derivatives and spot markets. For example, more and more unexpired derivative contracts are interpreted as new funds entering the market, regardless of prejudice.

At the same time, in the case of Bitcoin, there has been an increase in open positions in the futures market Indicative Of qualified investors want to increase their exposure to BTC.

Commercial sector increases exposure to Bitcoin futures

The latest OI readings indicate that more institutional capital is entering the Bitcoin market. Therefore, investors seem to be more confident to open new positions in the price range of 50,000-58,000 US dollars, and the trading volume of CME has been on the rise in the past 7 days.

Bitcoin futures-trading volume and open interest.Source: CME Group

Analyst Look As a sign of new buying orders in the futures market, OI, trading volume and prices all rose uniformly. This also puts the underlying asset in a better position to continue its upward trend. Therefore, Bitcoin seems to be experiencing a similar upward trend.

The main evidence for bullish Bitcoin comes from Record released by the Commodity Futures Trading Commission on October 5It noted that the commercial sector, including corporate hedgers, has accelerated their purchases of Bitcoin futures; they now hold a net position of more than 10,000 BTC.

CME BTC futures exposure changes.Source: CFTC, Forbes

However, at the same time, hedge funds and retail investors have shown net short positions in the Bitcoin futures market. Nonetheless, this may be their strategy to offset long positions elsewhere, such as the spot market.

This is mainly due to the fact that the CME Bitcoin futures price is higher than the annualized premium in the spot market. In recent days, the CME Bitcoin futures price has been 15% higher than the BTC spot price, and the average price in the first nine months of 2021 is about 7.7%.

The premium of Bitcoin futures relative to the spot price.Source: Skew

The macro fundamentals behind Bitcoin’s recovery

After the US regulator issued a statement, the latest round of purchases in the Bitcoin spot market also appeared.

For example, the US Securities and Exchange Commission (SEC) Chairman Gary Gensler (Gary Gensler) and Federal Reserve Chairman Jerome Powell (Jerome Powell), Discourage Bitcoin ban. at the same time, Growth prospects The news of the SEC’s approval of the Bitcoin ETF also contributed to the “buying rumors.”

related: Bitcoin analysts “highly doubt” the return to $50,000-will the weekly closing trigger a correction?

As US consumer prices continue to soar, investors are also seeking to invest in the Bitcoin market. According to data from the Department of Labor, the Consumer Price Index (CPI) 5.4% year-on-year increase September for the first time in 13 years.

JPMorgan Pointed out in its recent report Higher inflation has prompted institutional investors to seek to invest in Bitcoin, and some even regard this cryptocurrency as a better safe-haven asset than gold.In another report released in January 2021, the American banking giant Already expected In the long run, the price of BTC will reach $140,000.

“In the long run, gold being squeezed out of the market as an’alternative’ currency means that Bitcoin has a lot of room for growth,” it pointed out.

“The convergence of volatility between Bitcoin and gold is unlikely to happen soon. It is a multi-year process in our opinion. This means that a theoretical Bitcoin price target of more than $146,000 should be regarded as a long-term goal and therefore a Unsustainable price targets this year.”

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