- Bitcoin open interest (OI) hits all-time low signaling a prevalence in a spot induced bull market.
- Is a long squeeze on the horizon for BTC?
Bitcoin (BTC) is finally on an uptrend after a fortnight of terror, trading above the $6,200 USD mark for the past 24 hours. According to data collected from Skew Markets, the current bullish run may be on the verge of experiencing a long squeeze as the markets experience one of the lowest open interest volumes ever.
Bitcoin soars over 45% from yearly lows
BTC/USD witnessed one of its best days yet since the massive selloff on Mar. 12 which saw the price of the top crypto tank to the $3,600 USD level. Currently trading at an average of $6,610 USD across top exchanges, this represents over 69% growth since hitting a year low last week and an impressive 49% so far during the week.
BTC set an intraday high of $6,972 USD on Coinbase taunting a possible breach to the $7,000 key resistance level. However, it seems the current bullish momentum is heavily fueled by the spot market as open interest on BitMEX, CME and Bakkt derivatives hit a record low.
Bitmex OI at All time low of 58k.
— Mohit Sorout 📈 (@singhsoro) March 20, 2020
This may seem a positive move for BTC in the short term, as HODLers stock up on the coin for the cheap but is the momentum really stable?
Does a long squeeze ensue?
BitMEX set a historic low in its open interest on Bitcoin as the number dipped to 85,000 BTC contracts, approx. $385 million USD. CME options and Bakkt options were facing a similar case as the market signals a move from the derivative markets to spot BTC markets. CME recorded a low of $125 million on its BTC Futures with Bakkt options hitting a low of $3.5 million.
Could this signal an upcoming long squeeze as the bears await to open the shorts on the derivative markets? Well, on the daily charts, BTC indicators signal a possible continuation of the bullish momentum as the relative strength index (RSI) oscillates in a bullish trajectory.
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Been in the field since 2015 and he still love everything blockchain and crypto! FC Barcelona fan. Author and journalist. Follow him at @lujanodera.