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The Bitcoin market is showing signs of robust health and growing investor confidence as the notional open interest for Bitcoin futures contracts reaches a 26-month peak. According to CoinGlass, the total dollar value locked in active Bitcoin futures has surged to over $21 billion. This milestone comes as Bitcoin’s price hits $49,570 in the spot market, marking a significant uptick of 22% this year. The current open interest is inching closer to the record $24 billion seen in November 2021, when Bitcoin prices soared above $65,000.
This resurgence in futures contracts, a form of leveraged product, suggests a fresh wave of optimism and investment in Bitcoin, underscored by a 28% rally in just three weeks. Analysts attribute this rally to strong inflows into new spot ETFs in the U.S., signaling a bullish trend. While leverage amplifies risks, the current low overall market leverage points to a stable environment with reduced chances of sudden price drops due to forced liquidations. Despite a slight increase in the estimated leverage ratio, from 0.18 to 0.20, it remains well below last year’s highs, indicating a cautious yet positive outlook among investors.
