The notional open interest, which represents the dollar value locked in active Bitcoin (BTC) futures contracts, has surged to its highest level in more than two years.

According to data by CoinGlass, the open interest in both perpetuals and standard futures has surpassed $21 billion, a level last seen in November 2021 when the leading cryptocurrency reached its all-time high of around $70,000.

At the time of writing, Bitcoin is trading at around $49,700, almost flat over the past day.

Year-to-date (YTD), Bitcoin futures open interest has surged by 22%, coming close to the previous record of $24 billion observed in mid-November 2021.

Rise in Open Interest Suggests Renewed Interest in Futures

The rise in open interest indicates a renewed interest in leveraged products like futures and confirms the current bullish sentiment in the market.

Bitcoin has experienced a remarkable 28% rally in just over three weeks, largely driven by significant inflows into newly launched spot ETFs in the United States.

It’s important to note that leverage amplifies both profits and losses, making a notable increase in futures open interest a potential indicator of heightened price volatility.

However, despite the surge in open interest, the overall leverage in the market remains relatively low.

#Bitcoin Open Interest is up only since February.

It increased by +$3.3 Billion or +32%.

Spot premium & Funding rates still neutral so that’s good. pic.twitter.com/dSa0YmZEn2

— Daan Crypto Trades (@DaanCrypto) February 12, 2024

This suggests a lower likelihood of sudden liquidations of long (buy) positions, which could trigger a significant price crash.

Liquidations occur when exchanges forcefully close bullish or bearish positions due to a margin shortage, and such events often introduce substantial volatility into the market.

Data from CryptoQuant reveals that Bitcoin’s estimated leverage ratio has slightly increased from 0.18 to 0.20.

However, these levels are far from the levels observed in August of the previous year.

Additionally, the current futures open interest in BTC terms, which removes the price effect, is at 430,500, still considerably lower than the peak of 660,000 reached in October 2022, as reported by CoinGlass.

Analysts Expect Bitcoin to Reach $70,000 This Year

Analysts at investment firm Bernstein expect Bitcoin to resume its upward trajectory, surpassing its previous all-time high of $69,000 and potentially reaching $70,000 this year.

As reported, the analysts have expressed confidence in the cryptocurrency’s risk-reward profile, stating that no significant challenges are anticipated to impede its ascent.

In a note to investors, analysts Gautam Chhugani and Mahika Sapra highlighted the recent launch of 10 Bitcoin spot exchange-traded funds (ETFs) in the United States, which briefly pushed Bitcoin to $49,000.

Likewise, Anthony Scaramucci, the founder and managing partner of hedge fund SkyBridge, has suggested that the price of Bitcoin could potentially reach $170,000 in the coming year.

Scaramucci’s prediction is based on two key factors, including the growing demand for newly listed exchange-traded funds (ETFs) and the upcoming halving event scheduled for April.

He explained that if Bitcoin were to maintain its current price of around $45,000 at the time of the halving, it could see a remarkable surge to $170,000 by mid-to late 2025.

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