Bitcoin futures open interest soars by over 16%

The explosive rally comes amid a weakening dollar and promises more volatility in the cryptocurrency market.

In a surprising day for the markets, bitcoin futures open interest soared by over 16%, bringing the price of the flagship cryptocurrency to $102,480 USD. This phenomenon captured the attention of investors and analysts, while the US dollar shows signs of weakness.

After breaking through resistance at $99,500, the price appears to be on a clear path to new all-time highs. / TradingView

A change in the economic wind

On Monday, bitcoin futures open interest reached $65.46 billion, surpassing the $55.71 billion recorded the previous day. This increase coincides with a significant drop in the DXY index, which fell 0.59%, closing at 108.27 points. This reduction comes after statements by the US president-elect, which contradicted a report on a tariff policy.

The president's advisers indicated that, if implemented, the tariffs would focus on key sectors for national security, which represents a shift from the broader policy campaign promise.

Volatility and Opportunity: The Effect of Rising Open Interest

The Chicago Board of Trade (CME) reported the largest volume of bitcoin futures trading, with open interest reaching $17.59 billion. Binance follows with $12.98 billion, while other platforms such as Bybit and Gate.io round out the ranking. This renewed influx of capital not only brings more liquidity to the bitcoin market, but also indicates a growing interest in the cryptocurrency.

Bearish traders faced liquidations that reached $50.60 million in a 24-hour period, in contrast to $62.85 million in total. This situation warns of the intense competition between long and short positions in the current market environment.

How far can Bitcoin go?

Bitcoin's recent performance suggests an uptrend. After breaking through resistance at $99,500, the price appears to be on a clear path to new all-time highs. Analysts are now targeting next resistance at $106,500, provided Bitcoin remains consolidated above its recent support.

Accumulation by long-term investors is also notable; their wallets increased to 5.38 million BTC. In contrast, short-term investors are liquidating their positions, while "hodlers" are sticking to their long-term strategy.

In short, the combination of rising futures open interest, a weakening dollar, and investor action is pushing Bitcoin to new heights. With the market constantly evolving, all eyes will be on how these events play out in the near future.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before investing.