Open interest in Bitcoin derivatives reached an all-time high on October 21st as BTC came close to breaking the $70,000 price mark. CoinGlass reported in a post on X that the open interest (OI) on Bitcoin futures contracts had reached a record high of $40.5 billion. Open interest refers to the value or number of outstanding futures contracts that have yet to expire. It serves as a measure of the amount of money invested in Bitcoin derivatives at any given time, with higher OI indicating potentially greater leverage and volatility in the system.
Among the exchanges, the Chicago Mercantile Exchange (CME) had the largest share of the open interest at 30.7%, followed by Binance with 20.4%, and Bybit with 15%.
During periods of high open interest, sharp price movements can trigger cascading liquidations, which can lead to selling in the spot market and result in significant drops in the price of BTC. The most recent such event occurred in early August when BTC prices plummeted by nearly 20%, or around $12,000, in less than two days, dropping below $50,000.
According to TradingView, the asset reached a peak of $69,380 in early trading on October 21st. However, it encountered resistance and pulled back to trade at $69,033 at the time of publication. CoinGecko states that the asset is currently just 6.4% below its all-time high of $73,738.
In related news, researchers suggest that crypto liquidations may be more severe than previously believed. On October 20th, Cointelegraph reported that if Bitcoin surpasses $70,000, it could significantly boost the performance of altcoins like Ether (ETH) and Solana (SOL). Both assets are currently outperforming BTC in terms of daily gains, with Ether rising by 3.5% to surpass $2,750, and Solana gaining 6% during early trading on October 21st, coming close to $170. However, both assets have experienced slight pullbacks since then.
In other news, the latest edition of Hodler’s Digest features a Bitcoin forecast of $233,000, the arrest of a hacker responsible for breaching SEC X accounts, and more.