Sei (sei) 
Bitcoin (BTC) reached a historic high of over $72,000 on March 11, showing a 9.5% increase in the past week. The recent rally has been marked by significant volatility, with a 4.8% intraday rise to $70,055 on March 8, followed by a 5.9% dip to $65,935.
Bitcoin Bulls are cautious about the new all-time high due to the surge in leverage demand through BTC futures contracts. The $35.8 billion in Bitcoin futures open interest poses a risk as traders often heavily rely on leveraged positions.
Analyzing the data, it is evident that investors’ interest in Bitcoin futures is high, but it may not necessarily be bullish as futures longs and shorts are matched at all times, leading to volatility rather than a clear direction.
The Chicago Mercantile Exchange (CME) currently holds the largest share in Bitcoin futures, surpassing traditional crypto exchanges. However, in November 2021, Bitcoin futures open interest peaked near $69,000, followed by a 31.5% decline in just 30 days.
The current 495,380 BTC in futures open interest is significant enough to trigger sharp volatility spikes as Bitcoin’s price fluctuates. Recent data shows a surge in demand for leveraged BTC long positions, with the premium breaking the 10% neutral mark four weeks ago.
Retail traders buying above $72,000 could potentially lead to additional volatility, as seen in the funding rate for Bitcoin futures perpetual contracts reaching 2.1% per week, the highest in over 18 months.
While Bitcoin bulls have the advantage of strong inflows into spot ETFs and companies like Microstrategy continuing to buy more Bitcoin, the influx of retail traders into pricey perpetual contracts at $72,000 could lead to increased volatility.
This article serves as informative content and does not provide investment advice. Readers are encouraged to conduct their own research before making any investment decisions. For more news and updates on cryptocurrencies, visit Global Crypto News.
