Bitcoin’s latest rally had significant consequences for everyone.
- Bitcoin’s OI hit a record level of $74 billion, reflecting massive bullish sentiment The Futures market has been healthy and not overheated – A sign that bulls may have their way
On 21 May, Bitcoin’s [BTC] Open Interest (OI) hit a record high of $74.25 billion, raising hopes of a potential breakout to a new cycle high. Soon enough, this came to pass, with BTC hitting a new ATH of $111,381 on the charts.
Source: BTC/USD, TradingView
Since April, BTC’s OI has risen by over $24 billion, underscoring massive capital inflows in the derivatives market – A strong bullish cue.
Source: Coinglass
Over the same period, BTC has rallied from $76k to $110k, adding over $34,000.
However, such a spike in speculative interest in the Futures market also comes with leverage (betting using exchange loans) and liquidation risks. So, what’s next for the market?
$1.65 billion BTC shorts at risk
Source: Coinglass
Less than 24 hours ago, Coinglass’s liquidation heatmap for the 7-day window revealed $1.65 billion leveraged shorts piled at $108.5k.
When BTC blasted above this level, they all went underwater, underscoring liquidation risks to bears betting for a likely BTC top.
On the contrary, if there’s a reversal below $100k now, that would obliterate a whopping $12.5 billion of leveraged bulls.
Interestingly, the Futures market wasn’t overheated at the press time. According to the Funding Rate heatmap, there was no market froth despite BTC hitting a new ATH.
For the unfamiliar, funding rates are a mechanism used in the derivatives market to tie the underlying contract to the asset’s spot price.
Source: Coinglass
They are periodic payments, about 8 hours, by traders to hold their positions.
A positive funding rate means bullish sentiment, where leveraged bulls pay shorts to maintain their position. A negative reading means the opposite.
At the time of writing, funding rates for BTC were about 3% (green) and deemed healthy.
On the contrary, funding rates hit 50-100% in the last November-December period (orange). This reflected over-leverage and market froth that ended up in a pullback in early 2025.
Simply put, at press time, BTC was healthy market and could push for a new ATH.
That being said, based on the MVRV bands pricing model, BTC is now back in the upper band levels seen in early and late 2024.
If the trend repeats itself, BTC may fluctuate between $98k-$118k for the next two months.
Source: Glassnode
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