Bitcoin has once again risen above $31,000 amid a sudden upswing in open interest.
Open interest, a measure of outstanding futures contracts that haven't yet been settled, jumped more than $300 million in just two hours. This suggests a significant increase in trading activity and speculative interest in the cryptocurrency.
Analysts are pointing to a more violent price swing due to market suppression. The notion is that the longer and tighter a price is suppressed, the more dramatic the reaction when it eventually breaks free. This view aligns with the market activity seen today, which appears to be a bullish rebound after Bitcoin's price had been under pressure.
According to Glassnode co-founder Yann Allemann, Bitcoin's ascent above the $30,000 mark is a significant milestone, and the cryptocurrency now faces key resistance at the $30,500 level, according to market observer Negentropic. There is a rising buying pressure and the MACD (moving average convergence divergence), a trend-following momentum indicator, crossing above the "0" level suggests the momentum is shifting towards the bulls.If Bitcoin can clear the hurdles of $32,500 and then $34,000, it could indicate a stronger bullish trend in the making.
In other developments, Dan Morehead, CEO of Pantera Capital, pointed out that Bitcoin's correlation with the S&P 500 has returned to zero, meaning Bitcoin is moving independently of the broader stock market.
This decoupling could make Bitcoin an appealing hedge against potential volatility in these traditional markets.
Arman Shirinyan
