BitMEX Open Interest On Bitcoin Futures Reaches All-Time Lows, Is A Long Squeeze On The Horizon?

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  • 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.

Image: Coinstats

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.

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.

Skew Markets

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.

Been in the field since 2015 and he still love everything blockchain and crypto! FC Barcelona fan. Author and journalist. Follow him at @lujanodera.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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