Bitcoin futures open interest on the global derivatives giant, the Chicago Mercantile Exchange (CME), has surged to $5.2 billion, just $200 million shy of its previous all-time high in late October 2021.
Over the last 30 days, open interest in CME’s Bitcoin futures has grown from $3.63 billion to $5.20 billion, mirroring Bitcoin’s 26% gain during the same period, with the cryptocurrency currently trading at slightly above $44,000.
Between October 1 and 21, 2021, CME’s Bitcoin futures open interest saw a substantial increase from $1.46 billion to $5.45 billion.
This rapid growth in open interest coincided with a significant price surge for Bitcoin.
IG Australia analyst Tony Sycamore noted that the surge in open interest indicates renewed interest in Bitcoin, but it does not provide insight into the positioning of CME traders.
Sycamore referred to CME’s November 28 report to the United States Commodities Futures Trading Commission (CFTC), which revealed that “big players” on the platform were net short at the time, with 20,724 short positions compared to 18,979 long positions.
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Sycamore emphasized that it’s crucial to wait for CME’s upcoming report on December 12 to determine the current positioning of these major players.
He stated, “What we can’t see right now is whether the big players have gone from a net short to a net long.
If we saw the market getting extremely long, you’d be very worried about a snapback. The market that we could see last week was short, so I don’t think we’re at that point yet.”
The recent surge in Bitcoin’s price is not solely due to speculation regarding the SEC’s potential approval of spot exchange-traded fund (ETF) products, according to Sycamore.
He believes that other factors, such as the crypto market’s connection to the macroeconomic environment, play a more significant role in driving price action.
This includes the Federal Reserve’s signals to begin cutting interest rates, which can impact Bitcoin’s performance.
In November, CME overtook Binance in Bitcoin futures open interest, signaling increased interest from traditional financial institutions in crypto products.
While many analysts anticipate a spot ETF approval to lead to a significant price increase for Bitcoin, some are cautious, predicting a “sell the news” event in the days and weeks following such an approval.
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