Bitcoin Futures Open Interest Retests Pre-March Collapse Levels

Bitcoin (BTC) failed to break key resistance at $9,700 earlier on Friday, May 29, 2020, retracing back to current levels at $9,400 with the May 2020 option contracts expected to expire this Friday. Despite the retracement, the top cryptocurrency signals a possible recovery with BTC perpetual Futures open interest hitting levels last seen before the Mar 12 bloodbath in the market.

Moreover, the perpetual futures curve is slowly turning into an upward sloping one, showing the faith bulls have in the near term future.

BTC/USD Retraces Back to $9,400 USD

However, BTC/USD price hit resistance levels at $9,630 on Friday, retracing 2.4% in a couple of hours to trade at sub-$9,400 key support levels. In the opening hours of the New York stock market, bulls closed out most of their long positions as buying momentum slowed sending the price crashing to an intraday low of $9,344.

A bearish pattern forms on the daily charts of the BTC/USD relative strength index (RSI) which shows a bearish divergence with the volumes decreasing steadily since pre-halving days. However, the top crypto survived a bashing of sorts from U.S banking giant, Goldman Sachs, earlier in the week which shows belief in the crypto in its long term future and the near-term bullish reversal may be in hand.

Institutional Bitcoin Option Bulls Betting Big In The Market

There is an increasing interest in institutional investment in Bitcoin options sold on Chicago Mercantile Exchange futures. According to crypto derivatives data aggregator, Skew Markets, CME Bitcoin options volume on the exchange hit an all-time high on Thursday at $65 million USD.

Open interest is climbing >$250mln before expiry today of approx 2,000 May contracts pic.twitter.com/q2aAeI7mNg

— skew (@skewdotcom) May 29, 2020

Notwithstanding, the total BTC options open interest skyrocketed to an ATH of more than $260 million before the closure of May 2020 contracts, estimated at 2,000 calls and puts.

Billionaire and legendary investor, Paul Tudor Jones, and his fund’s entry into Bitcoin derivatives, and personal ownership of about 1% to 2% in BTC, strengthened the narrative on institutional investment. The institutional market is thriving as seen by the recent announcement of Grayscale purchasing about two-thirds of the total mined BTC since the halving.

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Lujan Odera

Been in the field since 2015 and he still love everything blockchain and crypto! FC Barcelona fan. Author and journalist. Follow him at @lujanodera.

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