As of October 21, the open interest (OI) for Bitcoin futures reached an historical peak, coinciding with Bitcoin nearing the $70,000 mark. Reports indicate that OI climbed to $40.5 billion on this date.

Open interest represents the total value or count of futures contracts that remain open. It is a measurement of how much capital is currently invested in Bitcoin derivatives. A higher OI suggests greater leverage, which can lead to increased market volatility.

Distribution of Open Interest

The Chicago Mercantile Exchange (CME) currently holds the largest portion of open interest at 30.7%, followed by:

• Binance: 20.4%
• Bybit: 15%

During periods of elevated open interest, sharp price movements can trigger a series of liquidations, potentially resulting in swift sell-offs in the spot market. Such events, referred to as “flush outs”, can lead to dramatic drops in Bitcoin’s price.

The last notable flush out happened in early August when Bitcoin prices fell nearly 20%—around $12,000—in under two days, dropping below $50,000.

Currently, Bitcoin prices reached a high of $69,380 in early trading on October 21, before facing resistance and falling back to approximately $69,033 at the time of this report.

As of now, Bitcoin sits about 6.4% below its all-time high of $73,738.

If Bitcoin manages to rally beyond the $70,000 threshold, it is anticipated to have a positive impact on alternative cryptocurrencies such as Ether and Solana. Currently, both assets have been leading in daily gains, with Ether rising by 3.5% to surpass $2,750, while Solana increased by 6% to nearly $170 in early trading on October 21, despite experiencing minor pullbacks since then.