The crypto market opened the second week of 2023 with bullish sentiment after Bitcoin prices rose comfortably above $17,000 on Sunday. Furthermore, the price of Ethereum (ETH) has rallied 3.6 percent in the past 24 hours to trade around $1,308, during the London trading session on Monday. As such, the total volume of the crypto market is about $33.38 billion, an increase of about 101.82% in the last 24 hours.

In particular, the Bitcoin and Ethereum futures contract market has contributed significantly to FTX’s recent rally from the lows. Bitcoin open interest (the number of options or futures contracts that traders and investors have in active positions) has indicated a possible price gain in the coming months.

Additionally, crypto open interest significantly indicates the level of liquidity in the industry, particularly from institutional investors.

It is worth noting that overall confidence in the digital asset market picked up in 2023 with increased government scrutiny following the FTX and Alameda saga. Also, smart contract chains like Solana and Cardano have posted a double-digit gain in the last 24 hours.

A Closer Look at Bitcoin and Ethereum Open Interest

Cryptocurrency open interest is a key indicator of whale trading, significantly affecting the underlying value of a digital asset. According to data provided by Coinglass, the total open interest for Bitcoin futures is approximately $9.38 billion. Major exchanges supporting open Bitcoin futures interest include Binance, OKX, ByBit, Bitget, and CME with $2.61 billion, $1.69 billion, $1.53 billion, $1.39 billion, and $1.2 billion respectively in the last 24 hours.

Ethereum futures open interest, on the other hand, totals approximately $6.62 billion in the last 24 hours. The top exchanges with the open Ethereum futures market include Binance, OKX, and ByBit with $2.26 billion, $1.07 billion, and $1.01 billion, respectively.

According to aggregated data provided by Glassnode, Bitcoin open interest for Q1 2023 indicates more calls than puts. In particular, call and put options on open interest refer to the purchase and sale of underlying assets, respectively.

Data from Glassnode, as shown below, indicates that Bitcoin traders are bullish on a further price rally in Q1. Also, the open interest of more Bitcoin calls is concentrated between $19k and $23k. Nonetheless, a significant number of traders believe that Bitcoin could drop to $15k once more before recovering in Q1.

glass node

In particular, a similar scenario was reported for Ethereum options open interest during Q1 2023. Interestingly, while some ETH open interest is $1600 at the end of Q1, most of the liquidity is concentrated between $3,500 and $6,000.

glass node

As such, Bitcoin and Ethereum prices have a high probability of closing the first quarter above the 200 moving average on the daily and weekly charts.

This post Bitcoin and Ethereum Q1 Open Interest Indicates Bullish Sentiments: Where Are BTC and ETH Prices Headed Next?

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