Bullish Sentiment Surges as Bitcoin Open Interest Sets New Record

Investor confidence in bitcoin soars as open interest in futures hits record levels. The market shows bullish trends, with significant options expiry on May 30 injecting further analysis. Experts predict strong price trajectory with diminishing probability of dips below $100,000. Overall, traders positioning for upward movements underscores positive sentiment.

Recently, there’s been a noticeable rise in investor sentiment towards bitcoin, as the total open interest in futures linked to the cryptocurrency has hit an unprecedented high. Market analyst Greg Magadini observed this surge, stating that it indicates a bullish outlook on bitcoin, especially with prices on an upward trend. Magadini, director at Amberdata, shared this insight via Telegram, noting that the open interest climbing to record levels is a good sign for market confidence.

In addition to bitcoin, the open interest for futures contracts across the wider crypto market has also been gaining traction, again reaching record highs. This general growth underlines a strong market sentiment, according to Magadini, which he reflected upon with his market analysis. The accompanying chart showcases this impressive increase in open interest, painting a vivid picture of the current crypto landscape.

Looking ahead, on Friday, May 30, a substantial volume of bitcoin options is set to expire, which analysts believe could have significant implications. Data from Deribit, referenced in a CoinDesk article, suggests that there is a considerable overhang in positive dealer gamma around the $110,000 zone, where bitcoin once peaked. Magadini noted that this could clarify why prices have been somewhat stagnant at that level, suggesting market-makers were actively engaged in selling.

The recent expiry is not without its complications, however, as the peak gamma for bitcoin currently sits around the $121,000 mark. Magadini anticipates this could lead to gradual price increases but warns against expecting drastic fluctuations without a significant trigger.

Paul Howard, senior director at crypto trading firm Wincent, also provided commentary on the situation. He highlighted that bitcoin’s volatility remains near historic lows, yet the impending options expiry could initiate a rise in implied volatility toward the 45 mark.

Howard pointed out that the price gap below $90,000 has been addressed, giving further credence to a sustained bullish trend in the near future. As summer approaches in the Northern Hemisphere, he notes that thinner market liquidity could lead to more pronounced price movements. Despite any expected volatility, he believes the likelihood of bitcoin dropping below the $100,000 threshold is low, especially when considering potential gains over the $110,000 mark.

Furthermore, the current options market data shows strong open interest in call options, reflecting a generally bullish attitude among traders. Noteworthy strikes at $112,000 and $115,000 for both current and upcoming expiry cycles indicate that participants are gearing up for a likely increase in bitcoin’s pricing trajectory, enhancing the positive picture painted by analysts about the future of this digital asset.