Bitcoin IO Data Increases Above $15 Billion on Derebit on the Hope of ETFs

Key Takeaways:

• Bitcoin Open Interest moved beyond $15 billion, nominal value.
• Open Interest, Technical Analysis, On-Chain data indicate an upmove.
• Correction would bring down prices near $35,400.

Bitcoin Options Open Interest data shows that in Derebit alone, Bitcoin options OI has spiked beyond $15 billion multiple times in the past week. Will it be just a speculative spike or is there any substance to the euphoria?

We have used Open Interest Analysis, Technical Analysis and On-Chain Analysis to check if there is a big move in Bitcoin's prices.

Why is Bitcoin Open Interest Surging?

There has been a lot of positive news on Bitcoin including SEC's decision which might approach soon as decision making window shrinks for the SEC. Crypto traders worldwide seem to have taken a positive view of the news as market euphoria continues for Bitcoin ETF.

The SEC has a few weeks to decide on the fate of Bitcoin ETFs with approvals may come by early 2024, which is also what experts are saying.

Amid such euphoria, Bitcoin Options open interest has spiked at $15 billion notional value multiple times in the past few days.

The notional value is the net sum of all the Bitcoins that option traders have the power to buy or sell through options market. This value is typically much more than the actual amount of Bitcoin in the actual trade because traders use leverage of 100x or even more while trading in derivatives.

What does Open Interest Data Indicate?

Open Interest Data shows that Bitcoin traders are expecting a price of $40,000 soon. This can be seen in the below chart where the price of $40,000 has the highest open interest of call options. Those who write/create call options generally do so at higher prices because

Another interesting thing which the open interest data shows is that there are little to no put options in the prices beyond $37,250 which shows that traders are positive that no big fall in BTC prices might take place anytime soon.

Even in the worst case scenario, the market expects the price to fall maximum to $27,000 which also has the last major call option open interest.

Does Technical Analysis and On-Chain Analysis Support IO Data?

Technical Analysis

At the time of writing this article, Bitcoin was trading around $37,415. On technical charts we see a clear bullish domination because:

1. BTC price was forming a bullish pennant pattern on the daily charts which has been complete at the time of writing this article. Any upwards price movement would indicate the confirmation of this pattern.
2. Even if the pattern fails to form, the nearest support is near $35,470, which would help it consolidate its price. From that support, the prices can again move forward to cross $37,900 where there is price resistance.
3. Relative Strength Index data on daily charts shows that Bitcoin price has strength in it. The RSI level took support at 60 and continued moving upwards to 65.
4. Moving Averages also seem to support a bullish move as MACD has started convergence.

On-Chain Analysis

1. Total Exchange Inflows and Outflows have reduced in the last week, which shows that investors are more interested in holding their BTC.

2. Further, since more than 84% of BTC holders are now in profit, there is a typical tendency to monetize the profits. Yet, people are HODLing, which indicates there is an expectation of higher prices.

The alignment of Open Interest, Technical and On-Chain indicators show that Bitcoin might expect an upmove soon. However, if the SEC does not allow a spot ETF, the price might correct, but not by a huge margin as witnessed before. The correction, this time, would be much more stable than earlier, setting the stage for another upmove.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.