BTC Futures Open Interest Hit 16-Month High

Derivatives of #BTC are showing a moderate uptrend, paving the way for fresh gains above $70,000.

Bitcoin price has been declining since testing $70,300 on May 27, and is currently near $67,500, a 4% drop in two days. However, support at $66,000 has been firm since May 17, providing some comfort to bulls who are not yet alarmed by this correction.

The potentially worrying data comes from the Bitcoin derivatives markets, as the number of BTC-equivalent leveraged bets, known as open interest, rose to a 16-month high on May 29.

This change was particularly notable after weak demand at a Treasury Department auction on May 28, which pushed the benchmark yield to levels that equity investors may find concerning.

On May 29, total Bitcoin futures open interest reached 516k BTC, the highest since January 2023 and an increase of 6% in the last week.

Chicago Mercantile Exchange (CME) leads the market with a 30% share, followed by Binance with 22%, and Bybit with 15%. This substantial open interest, equivalent to $34.8 billion, is a double-edged sword for the market.

High open interest may indicate bullish sentiment as it shows strong appetite for Bitcoin futures. However, if the bulls rely excessively on leverage, a typical 10% market correction could trigger cascading liquidations, exacerbating the price decline.