Bitcoin Surpasses $35,000, Triggering Significant Liquidations
The recent surge in the price of Bitcoin has caused a ripple effect in the market, with the cryptocurrency surpassing the $35,000 threshold for the first time in 17 months. This upward movement has led to a notable $275 million worth of short positions being liquidated on October 23rd, marking the largest occurrence of such liquidations since January 2023, according to the Bitfinex Alpha Report.
These liquidations are in line with the increased volatility and trading volume that has been observed across the entire cryptocurrency sector.
Resurgence in Institutional Interest
As Bitcoin‘s price continued to rise, an additional $153 million worth of short positions were liquidated on October 24th. These two days combined saw long liquidations totaling $200 million, with $130 million of long positions being liquidated on October 24th, penalizing late long investors.
October has become a pivotal period for Bitcoin, as institutional participation in the cryptocurrency has surged. Bitcoin options trading volume on the Chicago Mercantile Exchange (CME) is set to reach its all-time high for the month, exceeding $2 billion in monthly volume. This increase in trading activity highlights Bitcoin’s growing appeal to institutional investors, according to the Bitfinex Alpha report.
The open interest in Bitcoin options is also showing signs of recovery, currently standing at $1.15 billion for the month. While this falls short of its historical peak, it suggests a steady resurgence in institutional interest.
Investors Turn to Bitcoin Call Options
Within the options market, call options have become the preferred instrument for investors looking to capitalize on Bitcoin’s upside potential. In October alone, there has been a significant $4.3 billion surge in open interest for call options, an 80% increase that brings the total to $9.7 billion. This trend indicates that both experienced and new investors are allocating substantial funds to options.
While the increase in call options open interest does not immediately indicate a bullish outlook, it is worth noting that most of this new open interest is tied to year-end-dated options. This shift in risk appetite and investment strategy reflects strong confidence in the long-term value appreciation of Bitcoin.
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