Bitcoin (BTC) is in line with an explosive price action as the derivatives markets return to their formation in 2022, according to new forecasts.
In a tweet dated January 4, Vetle Lunde, analyst at Arcane Research, confirmed that open interest expressed in BTC (OI) has returned to an all-time high in November.
Open interest requires “fireworks” for several weeks
Bitcoin futures and options suffered a defeat at the turn of the year BTC / USD rebound, but as the holiday season ended, consensus began to form for a large return.
Some say that institutional traders should be the main force in the bitcoin markets, and derivatives are already showing signs of renewed interest.
OI has now returned to levels last seen in the third week of November, when BTC / USD itself reached an all-time high of $ 69,000.
On the contrary, financing rates are currently neutral – the main basis for the formation of a volatile movement.
Lundy commented, “Open interest rates denominated in perpetual bitcoins BTC exceeded its November high today with influence accumulated at neutral fund rates just below fund neutral prices. Looks explosive.”
BTC OI and Binance Funding Rate chart. Source: Vetle Lunde / Twitter
Lund is not alone. In a separate post on January 3, Filbfilb, co-founder of the trading platform Decentrader, noted the encouraging activity of OI.
“OI is too high for market value … we doubt we can see it last week of this month without fireworks,” he wrote.
Ethereum tops in 2022
Data from Cointelegraph Markets Pro and TradingView showed that BTC / USD traded at around $ 47,380 at the time of writing on December 4, as they recovered from the plunge that pushed the pair to a two-week low.
Related: Bitcoin Exchange balances are approaching their peak times as Bitcoin withdrawals resumed in January
While analysts generally said nothing about action in shorter time frames, altcoins continued to generate the most interest.
“The point of maximum economic opportunity for altcoins is still valid,” said Michael van de Poppe, a Cointelegraph contributor, reiterating his earlier belief in the opportunities offered by alternative markets.