Bitcoin and Ethereum’s Q1 Open Interest Indicate Bullish Sentiments – Where BTC & ETH Price Heading Next?
The crypto market opened the second week of 2023 with a bullish sentiment after Bitcoin prices comfortably surged above $17k on Sunday. Additionally, Ethereum’s (ETH) price has surged 3.6 percent in the past 24 hours to exchange around $1,308, during the early London trading session on Monday. As such, the total crypto market volume is about $33.38 billion, up approximately 101.82 percent, over the last 24 hours.
Notably, the Bitcoin and Ethereum futures contract market has significantly contributed to the recent rebound from FTX lows. Bitcoin’s open interest – the number of options or futures contracts held by traders and investors in active positions – has indicated potential price gain in the coming months.
Furthermore, crypto open interest significantly indicates the level of liquidity in the industry, particularly from institutional investors.
Worth noting, the overall confidence in the digital asset market has rebounded in 2023 with increased government scrutiny following the FTX and Alameda saga. Moreover, smart contract chains like Solana and Cardano have recorded a double-digit gain in the past 24 hours.
Closer Look at Bitcoin and Ethereum’s Open Interest
The cryptocurrency’s open interest is a key indicator of whale trading, which significantly affects the underlying value of a digital asset. According to data provided by Coinglass, the total Bitcoin futures open interest is approximately $9.38 billion. Top exchanges that support Bitcoin open futures interest include Binance, OKX, ByBit, Bitget, and CME with $2.61B, $1.69B, $1.53B, $1.39B, and $1.2B respectively in the past 24 hours.
The Ethereum futures open interest, on the other hand, totals approximately $6.62 billion in the past 24 hours. The top exchanges with Ethereum open futures market include Binance, OKX, and ByBit with $2.26B, $1.07B, and $1.01 billion respectively.
According to aggregate data provided by Glassnode, Bitcoin’s open interest for the first quarter of 2023 indicates more calls than puts. Notably, calls and puts in the options open interest refer to the buying and selling of underlying assets respectively.
Glassnode data, as shown below, indicates that Bitcoin traders are optimistic about a more price rebound in Q1. Moreover, more Bitcoin calls’ open interest is concentrated between $19k and $23k. Nonetheless, a significant amount of traders believe Bitcoin could drop to $15k once more before rebounding in Q1.
Notably, a similar scenario has been reported on the Ethereum options open interest during the first quarter of 2023. Interestingly, while a few ETH open interests are for $1,600 by the end of Q1, the majority of liquidity is concentrated between $3,500 and $6,000.
As such, Bitcoin and Ethereum prices have a high chance of closing the first quarter above the 200 moving average on both daily and weekly charts.