Open interest on Bitcoin derivatives hit a new record on Oct. 21 as BTC neared the $70,000 price level.

In an Oct. 21 post on X, CoinGlass reported that open interest (OI) on Bitcoin futures contracts reached an all-time high of $40.5 billion.

Open interest refers to the value or number of outstanding futures contracts that have yet to expire.

It reflects the amount of money invested in Bitcoin derivatives at any given time, with higher OI indicating more leverage and potentially greater volatility in the market.

The Chicago Mercantile Exchange (CME) held the largest share of open interest at 30.7%, followed by Binance with 20.4%, and Bybit with 15%.

During periods of high OI, sharp price movements can trigger cascading liquidations, which may lead to forced selling in the spot market, resulting in rapid BTC price drops.

The most recent such event occurred in early August when BTC prices plummeted nearly 20%, losing around $12,000 in value in under two days, falling below $50,000.

On Oct. 21, Bitcoin surged to $69,380 in early trading, according to TradingView, but encountered resistance and pulled back to $69,033 at the time of publication.

According to CoinGecko, Bitcoin is now just 6.4% below its all-time high of $73,738.

On Oct. 20, Cointelegraph reported that if Bitcoin surpasses $70,000, it could boost altcoins such as Ethereum and Solana.

Both assets are currently outperforming BTC in daily gains, with Ether rising 3.5% to surpass $2,750, and Solana increasing by 6%, nearing $170 in early trading on Oct. 21.

However, both assets have since pulled back slightly.

Sources:

https://cointelegraph.com/news/bitcoin-open-interest-exceeds-40-billion-as-brushes-almost-70k

https://x.com/coinglass_com/status/1848141277818507418