The key takeaways
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Bitcoin futures opened interest reached a record high of $72 Billion, signalling a rise in leveraged investments by institutions.
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BTC breakout chances are boosted by the liquidation of $1.2 billion worth of shorts priced between $107,000 and $108,000.
Bitcoin: The total open interest (BTC( ) futures soared to an all-time high on the 20th of May, raising concerns about bearish positions. The sheer volume of leveraged Bitcoin positions, despite the repeated failure to breach the $107,000 mark since May 18, could push Bitcoin to an all-time record high.
You can also find out more about the following: total open interest BTC Futures rose to $72 Billion on the 20th of May, an increase of 8% from just $66.6 Billion a week before. This leverage is largely driven by institutional demand. Chicago Mercantile Exchange leads with BTC Futures worth $16,9 Billion, and Binance follows closely behind, holding $12 Billion in open interest.
$1.2 billion in bearish BTC liquidations cluster at $107K–$108K
CoinGlass estimated that the biggest concentration of liquidations for BTC bearish futures is between $107,000 to $108,000. This amounts to about $1.2 billion.
Although it is impossible to know what will trigger a break above $108,000 that would force leveraged shorts into unwinding, optimism has been growing due to the rising concern over US fiscal debt. There is still uncertainty about the way in which the US government intends to reduce spending while increasing economic growth. This uncertainty stems from ongoing differences between Democratic and Republican legislators.
The yields of the 20-year US Treasury The rate is now 5.22%, up from the 4.82% recorded two weeks ago. It is possible that the US Federal Reserve will be forced by weak demand to become the buyer of the last resort in order to keep the market stable, thus reversing the 26-month-old trend. This strategy puts downward pressure on the US dollar Bitcoin has become a popular alternative to traditional hedging methods for investors.
Bitcoins absorbs the Bitcoin flow but Gold is still dominant
Many investors find gold less appealing because of its market cap and annual growth rate. For context, the entire S&P 500 index is valued at $53 trillion, while US bank deposits and Treasury bills (M1) amount to $18.6 trillion. Bitcoin, on the other hand, is currently worth $2.1 trillion, which is roughly equal to the size of silver.
Meanwhile, some regions, notably the US, have begun laying the groundwork to shift portions of their gold reserves into Bitcoin—an action that could easily propel BTC to a new all-time high. The reallocation of 5% from gold to Bitcoin would result in a flow of $105 billion, or 1,000,000 BTC priced at $105,000.
Related: Bitcoin ready to ‘vaporize’ shorts once price discovery above $110K begins
Strategy, the US-listed company led by Michael Saylor holds currently 576,230 BTC. The primary driver for Bitcoin’s rise above $108,000 is institutional buying. A move of this magnitude would lead to the liquidation and acceleration of bearish, heavily leveraged positions. Nevertheless, macroeconomic insecurity continues to affect investor sentiment.
As Bitcoin flirts with the $107,000 mark, those holding short positions face heightened risk of forced liquidations—an outcome that could further fuel upward momentum in price.
This is only a general article and not intended as investment or legal advice. These are solely the opinions, views and thoughts of the author and may not reflect the opinions and views of Cointelegraph.
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Source: cointelegraph.com
