The cryptocurrency market is witnessing an interesting situation as Bitcoin surpasses the $28,000 mark, experiencing a 70% increase since the beginning of the year.
However, Bitcoin’s open interest (OI) tells a different story. The indicator has been consistently falling, indicating a decrease in speculative activity. Open interest is a metric that reflects the volume of outstanding futures contracts, potentially indicating market confidence in leaving positions open.
This suggests a notable contraction in market speculation, a significant departure from the typically volatile Bitcoin market. The simultaneous rise in the price of Bitcoin and the decline in open interest, which has dropped 28% since the beginning of the year, reflects a market less driven by speculation and more by long-term investor confidence.
According to an analysis by Glassnode, this signals a potential shift in Bitcoin investor behavior, with possible implications for the overall stability of the cryptocurrency market.
Bitcoin’s price movement
After closing September with gains for the first time in seven years, October is starting optimistically for Bitcoin, with a strong chance of being an “Uptober,” according to the historical average performance of monthly BTC prices.
“The options volume at the end of October potentially indicates an exciting price action,” highlighted the analyst known as @BTC_Update.
According to the analyst, it is important to remember that history does not exactly repeat itself, but it rhymes. So, one should not overlook the potential pattern of a bullish trend reversal, with the right shoulder potentially forming in the range of $29,500 to $30,500.
“The cryptocurrency market is notorious for its volatility, and investors should continue to closely monitor these market trends. However, data from the beginning of the month finally signals a breakthrough of the $31,500 resistance for Bitcoin,” he said.