Bitcoin price declines at $53k as futures open interest hits 2-year high
Bitcoin (BTC) price surged to a new 2024 high of $53,019 on February 20, before suddenly trading back to $50,000 on some exchanges. Traders are citing the consistent position BTC ETF and the upcoming supply halving event as the main factors behind the price movement, and at the time of publication, the price of BTC has moved above $52,100.
Let's take a look at the main reasons why the price of Bitcoin is volatile today.
Bitcoin futures open interest hit a 26-month high.
Bitcoin futures open interest (OI) has reached an annual high, reaching a level seen at the end of November 2021. This shows that there is an increase in trading activity around the largest cryptocurrency by market capitalization.
Information cryptocurrency future trading and information platform Coinglass Total OI for BTC futures reached $22.69 billion on February 22, 2020, the highest since November 11, 2021, indicating that it is approaching the peak of $23 billion recorded at that time.
Bitcoin futures OI rose more than 30% in 2023, matching Bitcoin's 23% year-to-date rally to $53,000, reaching levels last seen in December 2021.
Open Demand Hits $22B, Remember What Happened Last Time At These Levels?
Study 12 Apr '21 and 8 Nov '21 #Bitcoin pic.twitter.com/5KwE2LlJt8
— Alexander of Crypto (@Alexander_XBT) February 15,
Open interest is a measure of the total value of all outstanding or “unsettled” Bitcoin futures contracts, and rising values reflect market activity and trader sentiment around the pioneering cryptocurrency.
Spot Bitcoin ETF revenues increase
Investors' continued bullishness appears to be fueled by increased outflows from gold ETFs and increased inflows into spot BTC ETFs. Bitcoin has topped $49,000 since the Jan. 10 spot bitcoin ETF was approved by the US Securities and Exchange Commission.
Data from Farside Investors shows that $4.91 billion has flowed into Bitcoin ETFs in the six weeks since trading began on January 11.
According to the CoinShares Digital Asset Fund Flows weekly report, total weekly inflows into the newly developed space Bitcoin ETFs reached $2.5 billion last week.
CoinShares analyst James Butterfill said:
“These inflows, combined with recent positive price movements, pushed total assets under management (AuM) to $67 billion, the highest level since December 2021.”
In the year On February 17, financial analyst Tedtalks Macro highlighted an average $182 million increase in net income per day to separate Bitcoin ETFs, saying, “Post-Half we need ~$25M in net income per day to separate ETFs alone. “Compensating Mineral Production.”
The upcoming Bitcoin halving, which is expected to reduce the reward to miners by 50%, is also expected to play a major role in further fueling investor interest in BTC. The halving event historically has Bitcoin in the months following the event before going into a parabolic rise.
RELATED: Bitcoin holdings on Coinbase hit lowest level since 2015 as whales spend $1B BTC
Bitcoin traders focus on the next leg
Data obtained by IntoTheBlock shows that Bitcoin traders are focused on the next leg of the current rally. The Price Around Money (IOMAP) model shows that a large number of BTCs were previously bought at an average price of $52,081. Some of this could be liquidated as investors break even, indicating strong resistance in this area.
What is clear is that traders are determined to keep the price above $52,000. According to independent analyst Ali, buyers are now trying to fight a new battle to defend the support zone from $52,000 to $51,700, and the proximity above or below this area “will determine the next direction of $BTC”.
On the #Bitcoin 10-mins chart, the TD Secutial support trendline is sitting at $51,700, while the resistance trendline is at $52,515. A sustained close outside this zone will determine the direction of $BTC's next move. pic.twitter.com/D0awMEQTxp
— Ali (@ali_charts) February 19, 2024
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
