According to data from The Block’s Data Dashboard, open interest in Bitcoin options traded at the Chicago Mercantile Exchange (CME) has reached an all-time high. In the past 24 hours, open positions in CME Bitcoin futures contracts have surged, with outstanding contracts nearing a value of $2 billion. This development raises questions about the potential impact on Bitcoin’s price.
Additional data from blockchain analytics platform Velo Data confirms that the open interest in CME Bitcoin futures options has hit $2.1 billion. The increase in open positions indicates a market with high liquidity and significant participation from numerous traders. Open interest represents the total number of outstanding option contracts that have not yet been settled.
When open interest increases, it suggests an uptick in sophisticated trader activity, with new contracts entering the market and being added to the existing pool. This is a key metric for gauging market sentiment and potential future price movements.
Data from blockchain analytics platform Coinglass reveals that for the end-of-December expiration date, open interest is skewed towards more long positions than short, with 65% longs compared to 35% shorts. When the volume of long positions exceeds that of shorts, it is typically interpreted as a bullish indicator for the market.
Analysts at Bitfinex have commented on the futures market, noting that traders are betting on interest rate cuts as early as March, with expectations for further reductions throughout the year. These predictions align with data from the CME FedWatch tool, which indicates a 66.7% probability that the US Federal Reserve will lower interest rates by 25 basis points in March 2024.