Bitcoin Open Interest at 2-Month High... $47.9 Billion Leverage, Volatility Explosion Predicted

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While Bitcoin (BTC) has been trapped in a narrow price range for two months, new positions worth $47.9 billion have accumulated in the derivatives market, increasing the possibility of expanded volatility accompanied by large-scale liquidations.

According to crypto media outlet Finbold on July 29 (local time), the 30-day change in Bitcoin Open Interest (OI), as compiled by CryptoQuant, increased by approximately 750,000 units. At that time, its value reached about $47.92 billion, marking the highest level in the past two months. Open interest refers to the total number of futures contracts in the derivatives market that have not yet been settled.

By exchange, Binance saw the largest 30-day increase in open interest, with approximately 336,550 units, exceeding $21.53 billion. Gate.io saw approximately 319,880 new funds flow into its derivatives sector, and Bybit's increase also surpassed 137,860 units, valued at over $8.8 billion at the time. The steady increase in open interest over the past two months indicates that speculative trading using leverage has become active again.

ArabChain analyzed that if this trend continues while Bitcoin trades around $63,000, volatility and the potential for large-scale liquidations could both increase when the price moves sharply in either direction. In a situation where open interest has surged, a cascade of liquidations of short positions during an upward movement or long positions during a downward movement can further amplify price movements.

According to Coinglass, the open interest-weighted funding rate generally remained positive. The funding rate is a fee set by exchanges to balance the price of perpetual futures with the price of the underlying asset, and a positive rate usually indicates bullish sentiment. Bitcoin has been trading sideways between $58,550 and $66,300 over the past two months, but if it decisively breaks out of this range while leveraged positions continue to build, strong directional movement is likely to occur.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*