DatafromCoinGlassshowsthatBitcoin’s(BTC)futureopeninteresthasskyrocketedto$40.5billion.ThenextbigsurgeinopeninterestappearedwhenBitcoin’spricereachednearly$70k.Thisincreaseshowsahugesurgeininvestors’interestinBitcoinderivativemarkets.
ThemarketleaderistheCME,with30.7%oftheBitcoinfuturesopeninterest.Themarketishighlyconcentrated,asprovenbyBinance,with20.4%,followedbyBybit,with15%.ThisdistributionshowsthemainroleofthemajorexchangesindrivingBitcoin’sderivativemarket.
ThisrisingOpenInterestalsowarnsofcorrespondingsystemleverage,whichcouldbeexplosive.Cascadingliquidationsmayhappenwhenpricesshiftsharply,oftenresultinginforcedspotmarketsales.ThesescenarioscouldresultinbigpricedropslikeinAugust—aleantwodaysinwhichBitcoinlostcloseto20%.
BitcoinPriceApproaches$69KAmidElection-DrivenSurge
EarlytradingonOctober21sawBitcoinhit$69,380,beforeresistance,retracingtoaround$69,033.However,Bitcoinisjust6.4percentawayfromitsall-timehighof$73,738.
ThecurrentpriceboomisrelatedtotheupcomingU.S.presidentialelectiononNovember5.WiththechancesofDonaldTrumpreturningtoofficeincreasing,marketsentimentisstartingtofavorBitcoin.Becauseofhisadministration’slenientcryptoregulation,hispotentialvictoryhelpssupportcryptomarkets.
However,thepriceofBitcoinhasincreasedthankstothesepoliticalfactors,whilethebroadermarketstillawaitsadditionaldevelopments.Focusingoncorporateearningsandelectionrisks,traderswilllookawayfromnobigeconomiceventsthisweek.Thatvolatilityishappeningwithinthecryptocurrencymarket,andthereisongoinguncertaintysurroundingtheelection.
EtherandSolanaRallyasBitcoinDominates
WhileBitcoinhasbeenmakingheadlines,itisn’tthecasefornewaltcoinslikeEthereumandSolanawithdailygains.Etherclimbedby3.5percentto$2,750,whileSolanamorethandoubled,risingmorethan6percentto$170.Bothassetshavepulledbackslightlyfromtheirrecenthighs.
Thecombineddynamicsofthebitcoinmarketandthoseofthealtcoinsaddalayerofcomplexitysincetheperformanceofaltcoinscanbeimpacted.Bitcoinmaybethestar,butinvestorsareincreasinglybullishonaltcoinstoboostreturns.Asthemarketgrows,sodoesinterestinalternativedigitalassets.
ButwithBitcoinfuturesopeninterestontherise,altcoinsalsohaveriskstoworryabout.IfthepriceofBitcoinswingswildly,altcoinsmaytoo.Forthisreason,marketparticipantsmustkeepcheckingBitcoinandaltcoinsforthepossibilityofpricemovementsinthecomingweeks.
U.S.ElectionFuelsBitcoinSurgeAmidUncertainty
TheU.S.presidentialelectionisdrivingBitcoin’srecentsurge.BeforeNovember5,marketparticipantsreckonedwithhowtheelectionoutcomesmightaffectcryptocurrencymarkets.DonaldTrump’spoliciesarebecomingmorecrypto-friendly,openinguptoBitcoin,whichhasboostedhispollingnumbersandbroughtupBitcoin.
UnderTrump’sadministration,higherU.S.interestratescouldboostBitcoinbyweakeningothercurrencies,accordingtomarketanalysts.‘Thefactthatthedollarhasbeenstrongisafactorinrecentmarketmoves,promptingtraderstofindawaytohedgeagainstcurrencyrisk.’Tradersarenowconsideringwhethertogearupforelection-relatedtrades,aswith15daystothevotingday,theycanmakethosedecisions.
Tradersalsolookatcorporateearningsreports,whichmayinfluencemarketsentimentbeyondpoliticalfactors.Combinedwithelectionuncertainty,themarket’ssimplevolatilitybecomesevenmorecomplex.
thecoinrepublic.com