Open interest (OI) in Bitcoin futures and perpetual pairs on centralized exchanges (CEXs) have surged to a historic high following BTC unwavering rally to levels not seen since November 2021.
According to Bitfinex’s latest weekly report, OI for Bitcoin futures and perpetual pairs reached $26 billion, surpassing the previous record of $24 billion set in Q4 2021. This rise signals growing investor confidence in a pre-halving rally pushing BTC price to and beyond its 2021 ATH of $69,000.
Bitcoin Open Interest Surges
Open interest for Bitcoin futures and perpetual pairs represents the cumulative value of all unsettled Bitcoin futures contracts. The metric serves as a gauge for market sentiment and investor engagement with BTC.
Bitfinex cited an analysis by crypto futures market data platform Coinalyze, which found that total Bitcoin OI across multiple decentralized exchanges (DEXs) also rose to $41.8 billion last week. Analysts have noted the increase in OI across CEXs and DEXs since January 2024, establishing that it correlates with the rise in BTC price.
Bitcoin’s 44% rise in February and its latest surge to a new all-time high have been primarily driven by inflows into the spot BTC exchange-traded funds (ETFs). In less than two months after their launch, the ETFs have acquired over 146,522 BTC worth more than $7.5 billion, far exceeding all predictions.
The average expectation for the ETFs’ first-year inflows was $28 billion; however, the growth so far has put the products significantly ahead of schedule. With billions of dollars of capital yet to enter the ETF space from management advisors like Morgan Stanley, Wells Fargo, and Bank of America, the sector still has vast untapped potential for growth.
Altcoin Season Ramping Up
On the other hand, altcoins have continued to gain traction, showing signs of an imminent alt season, which is a period where crypto assets, aside from BTC, see major capital influx and spike in market speculation.
Bitfinex thinks the crypto market may be at the onset of an altcoin season, as seen in a 50% surge in TOTAL3, an index for all cryptocurrencies except BTC and ether. The market cap of the index has risen significantly from its bear market record of $450 billion to $640 billion.