On November 4th, the CryptoQuant market data aggregator was released Publicity a graphic that shows this Binance’s Estimated Leverage Ratio (ELR), open interest divided by Bitcoin reserves (BTC), has hit new all-time highs.
The record was set on November 3rd after a surge in open interest pushed Binance’s ELR above 0.18 for the first time.. The spike in ELR came just before Bitcoin hit a double bottom of around $ 13,400.
The new data suggest so Bitcoin’s bullish momentum towards 2020 above $ 14,000 may have been fueled by leverageThis could mean that markets will continue to experience significant volatility in the short term.
However, Binance also saw its largest daily BTC withdrawal on November 3rd;; $ 816 worth of bitcoin was exchanged within 24 hours.
Binance hasn’t been the only platform to see a surge in open interest recently – data from Skew suggests that The combined open interest in BTC futures tests all-time highs in the upper-mid range of $ 5 billion.
The growing open interest is also due to BitMEX’s recent decline in market share.as the exchange is currently facing US Department of Justice money laundering fees.
According to Messari Rising open interest can indicate “bullish sentiment” as long as it is driven by long positions. The research company too shows That the data suggests that new capital is entering cryptocurrencies:
“Rising prices during an uptrend while open interest is also rising could mean new money is coming into the market.”
The rise in open interest is also due to the fact that the number of BTCs on exchanges has steadily declined since May, suggesting this Buyers hoard bitcoin from exchanges and place it in offline stores as a long-term investment.
The long positions at Bitfinex have also risen steadily since the beginning of October, rising from 25,000 to 29,000 at the time of going to press.. While Short positions They have also increased since October 20th, doubling from 3,250 to 6,770. The bulls seem to have a tight grip on the markets.
In the last few hours BTC has hit new highs above $ 14,300 for 2020.