• Bitcoin futures open interest has grown ahead of the FOMC meeting.
• This increase in OI is being attributed to increased institutional interest in Bitcoin futures.
• The rebound in OI began in mid-January and is one factor contributing to the recent uptick in Bitcoin’s price.
Bitcoin Futures Open Interest Grows Ahead of FOMC Meeting
The open interest for Bitcoin futures has grown significantly ahead of the Federal Open Market Committee (FOMC) meeting, with insights from Glassnode indicating that more money is flowing into the market.
Increase In Open Interest
Open interest on futures contracts for any given asset varies daily, representing the amount of cash flowing into the market. An increase in OI means that more money is moving into futures contracts, while a declining trend shows positions are being closed and money is moving out of the market.
Analysis Of Futures Market
CryptoSlate’s analysis of the open interest for Bitcoin futures showed a notable increase in OI since mid-January, which points to investors gearing up for a significant market movement. Most of this growth can be attributed to increased institutional interest in Bitcoin futures — CryptoSlate analysis showed that 20% of the total Bitcoin futures OI came from CME.
Price Impact
This increase in OI is one factor contributing to the recent uptick in Bitcoin’s price as historically, market volatility tends to increase before and during the Federal Reserve’s meetings.
Conclusion
In conclusion, it appears that more money is moving into bitcoin futures contracts ahead of this week’s FOMC meeting, potentially leading to positive price action following its conclusion.