Bitcoin (BTC) has been highly volatile in recent weeks, rallying above $16,000 for the first time in three years. But the futures market’s open interest indicates that a large volatility spike is likely very close.
The term “open interest” refers to the total sum of contracts that are actively open in the futures market. If the open interest is high, it means there is a high number of traders betting on Bitcoin price action.
Bitcoin futures aggregated open interest. Source: Skew
Currently, as of Nov. 13, Bitazu Capital founding partner Mohit Sorout pointed out that the open interest of Bitcoin futures is at an all-time high. This means that the chances of heightened volatility in the near term should not come as a surprise.
Sorout said that the “liquidation fest” has not started, referring to Bitcoin’s tendency to see cascading liquidations following large price movements. He said:
“BTC futures and perpetuals aggregated Open Interest has made a new all