Bitcoin appears to have hit a ceiling as the price continued to hover below the psychological resistance level of $30,000. This has led some to believe that the rally may soon come to an end since futures OI has been relatively flat throughout the year.
But the options market has a different story to tell.
Potential Bitcoin Rally?
According to the latest chart by Glassnode, the amount of Open Interest in Bitcoin Options contracts has reached $10.3 billion. Its futures contracts, on the other hand, stood at $10 billion, indicating that the amount of OI in Bitcoin Options contracts has surpassed the future contracts for the first time ever.
Open interest can help traders in getting a better sense of whether the market is getting stronger or weaker, bullish or bearish. Hence, a high number of call options being taken for Bitcoin evidenced that many market participants are bullish on its price trajectory and are expecting a surge.
For the first time, the amount of Open Interest in #Bitcoin Options contracts ($10.3B) has surpassed that held in Futures contracts ($10.0B).
Futures OI has been relatively flat in 2023.
This results from significant call option buys, as investors start to speculate on higher… pic.twitter.com/JtKM0uQwZP
— glassnode (@glassnode) April 8, 2023
An increased trading volume, which was up by 28.39% over the past 24 hours, further validated the bullish narrative. Over the same period, Bitcoin’s price also saw a minor 2% surge. On the YTD basis, the crypto-asset recorded more than 73% price gains.
The flagship crypto has seen significant accumulation in recent times, as per Glassnode’s data. The increase in price action has prompted the number of non-zero addresses to skyrocket near a whopping 45.5 million, suggesting a great deal of improvement in Bitcoin’s on-chain activity.
Another blockchain analytics firm, Santiment, observed a rising rate of Bitcoin “hodlers.” It said that the “traders seem to have become increasingly content in keeping their bags unmoved for the long-term.” Interestingly, it also pointed out that a similar trend transpired in January-April 2021. This was when Bitcoin rose above $64k for the very first time.
Meanwhile, the Bitcoin network hash rate, as well as the mining difficulty, reached ATHs, as recently reported. Owing to the steady price surge, the miner revenue also experienced nearly 70% growth since the beginning of the year. This is a much-needed respite after a rocky 2022.