Bitcoin Open Interest Hits Record High as Prices Surge

Bitcoin's impressive ascent to $75,000 has driven Open Interest (OI) to an unprecedented $45.41 billion, reflecting a 13.29% increase since November 5, according to CoinGlass. Open Interest measures the total number of active derivative contracts, including futures and options, indicating a rise in market activity as traders open new long and short positions.

The increase in OI aligns with Bitcoin surpassing its previous all-time high of $73,800 set in March.

Market Sentiment Indicates Potential for Further Price Increases

The surge in trading activity suggests that market participants are preparing for additional price increases. Analysts have noted that approximately $1.26 billion in short positions are vulnerable to liquidation, as traders are betting against a pullback to the earlier high of $73,679.

Currently, Bitcoin is trading at $75,792, with analysts maintaining a positive outlook. Veteran trader Peter Brandt believes this rally is consistent with Bitcoin's bull market cycle.

Brandt stated, “Bitcoin is now in the sweet spot of the bull market halving cycle that should top in the $130k to $150K range next Aug/Sep,” on November 6.

Despite concerns about potential overvaluation at these all-time highs, some analysts argue that Bitcoin still has room for growth. CryptoQuant, a blockchain analytics firm, asserts that Bitcoin is not "overheated." Its Market Value to Realized Value (MVRV) ratio, which gauges whether an asset is overbought, remains significantly below peak levels. Currently, Bitcoin’s MVRV stands at 2.19, compared to 2.87 during its March high.

Bitcoin's Position in the Global Market

Crypto analyst Rajat Soni highlighted Bitcoin's early stage in global adoption, stating, “We are so early in Bitcoin’s adoption that you can still exchange pieces of paper ($, €, £, etc.) for BTC because most of the world thinks fiat currencies are backed by something tangible.”

Bitcoin has climbed to the 9th position in global market capitalization rankings, surpassing Meta Platforms (Facebook) amid a rally fueled by optimism surrounding Donald Trump’s victory in the 2024 presidential elections. With a market cap of $1.46 trillion and a price of $73,800 per Bitcoin, the cryptocurrency has overtaken Meta, which has a market cap of $1.445 trillion.

This is not the first time Bitcoin has surpassed Meta; it also did so in March after reaching a new record high above $73,000. The list of top assets by market cap includes major technology companies and precious metals, with Gold leading at $18.359 trillion, followed by NVIDIA at $3.431 trillion, and Apple at $3.377 trillion.

Market Reactions to Political Developments

Ryan Lee, Chief Analyst at Bitget Research, commented, “The market seems to have reacted in advance to Trump’s earlier hints about potentially designating BTC as a strategic reserve asset.” He added, “If Trump were to win, BTC could continue driving the market higher without major pullbacks, potentially reaching even greater highs.”