Wed 21 May 2025 ▪
3
min read ▪ by
Bitcoin reaches a record level of open interest. As its price flirts with $107,000, a possible massive liquidation of short positions could propel BTC to a new all-time high. Details below!
In Brief
- Bitcoin’s record open interest of $72 billion increases the risk of massive liquidations.
- US debt is pushing investors to shift gold reserves towards bitcoin.
Open Interest on Bitcoin: Record Leverage and Imminent Liquidations
The cryptocurrency market today seems marked by a surge in open interest on bitcoin futures contracts. Specifically, it has reached an all-time high of 72 billion dollars. This represents an 8% increase in just one week.
For many crypto experts, this figure demonstrates increased confidence from institutional investors in the BTC dynamics:
- the Chicago Mercantile Exchange (CME) with 16.9 billion open positions;
- followed by Binance with 12 billion.
However, this high leveraged exposure carries significant risk for bitcoin. 1.2 billion dollars in short positions concentrated between $107,000 and $108,000 risk being liquidated if a breakout occurs.
These forced liquidations could:
- trigger a domino effect;
- amplify volatility;
- push the BTC price beyond its recent ceilings.
Bitcoin Facing US Debt and Institutional Flows
The macroeconomic situation heavily weighs on the financial market. This mainly refers to the US budget debt which creates persistent uncertainty. Adding to this is the rise in 20-year Treasury bond yields. This context indeed pushes investors to seek alternative hedging strategies, with bitcoin leading the list.
In parallel, notable movements are observed with the possible reallocation of part of the digital gold reserves towards BTC. A modest rotation of 5% of US gold reserves would equate to an inflow of 105 billion dollars. This represents about one million BTC at $105,000.
This dynamic illustrates BTC’s growing role in diversifying institutional portfolios, as evidenced by the levels of open interest on the futures markets.
As bitcoin approaches $108,000, a record open interest could create a dynamic conducive to a new all-time high (ATH). However, volatility always requires caution. To be continued…
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My name is Ariela, and I am 31 years old. I have been working in the field of web writing for 7 years now. I only discovered trading and cryptocurrency a few years ago, but it is a universe that greatly interests me. The topics covered on the platform allow me to learn more. A singer in my spare time, I also cultivate a great passion for music and reading (and animals!)
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
