CME Bitcoin Futures OI Hits New ATH, New Money Flowing in as Network Gets Stronger
The price of Bitcoin struggled to cross $12,000, with no success over the weekend, but by mid day today, it was off to the races. Soaring to $12,450.
However, even at its current price level, 95% of bitcoin UTXOs are in a state of profit. Glassnode noted,
“Extended periods at this level and above are characteristic of bull runs as BTC moves towards new all-time highs.”
“Currently, as Bitcoin consolidates between $11,100 and $12,100, short-term implied volatility is up nearly 20% and medium- to long-term implied volatility has been up 10% over the week — indicating that the market is expecting further price movements.”
Bitcoin has successfully retested the $11.400-$11.600 area into new support for the first time since early December 2017 pic.twitter.com/XEZxTJz2Wk
— Rekt Capital (@rektcapital) August 17, 2020
Stronger than Ever Network
Meanwhile, the largest network is getting stronger and more active.
Bitcoin registered a surge in its usage throughout July and August, with an average of about 1 million active addresses per day recorded since July 27th. If this growth continues, bitcoin should soon hit its all-time high of 1.29 million daily active addresses set in Dec. 2017.
In the meantime, the Bitcoin hash rate has hit a new peak again. If the hashing power used in mining bitcoin remains at current levels, bitcoin's difficulty will adjust in a week to new all-time highs as well.
While the layer 1 is healthy, secure, and growing, layer two payments system the Lightning Network has been slow with just over 1k BTC held in Lightning channels with over 13.5k open channels.
Attracting Interest from Institutions
Yet another ATH was seen in CME bitcoin futures open interest.
The leading digital asset has been attracting institutional interest for some time now, thanks to all the unprecedented money printing the central bank is doing, which is raising the fears of currency debasement and inflation.
As we reported, after billionaire investor Paul Tudor Jones allocated 1% to 2% of his portfolio in Bitcoin, MicroStrategy replaced cash with bitcoin as a reserve asset.
Also, ex-Prudential CEO George Ball said over the weekend that it is time to invest in bitcoin. According to him, the digital asset would gain no matter the Fed’s next decision — continue to provide liquidity or stop all the stimulus.
Another sign of institutional interest is the all-time high open interest on CME bitcoin futures, which hit $864 million on Friday, an increase of 137% in the past month. The trading volume has also been growing on the regulated platform, keeping between $400 million to $800 million, as per data source Skew.
— Unfolded (@cryptounfolded) August 15, 2020
The highest open positions, meanwhile, are on OKEx at $1.22 billion, followed by BitMEX at $1.02 billion, Huobi $750 million, and $450 million on both Binance and Bybit.
The bitcoin futures contracts are also in contango with that of September trading above $12,000.