Bitcoin’s $3 Billion Open Interest Under Threat, Putting Price at Risk

• Over $3 billion in options and futures sits above the $118k strike, implying big exposure and potential liquidation risk if Bitcoin falls
• Open interest in Bitcoin futures has surged to around $57.4 billion
• Funding rates are historically low, about 10% annualized compared to 80% in 2023

Daan Crypto highlights that over $3 billion in options and futures sits above the $118k strike, which can imply big exposure and potential liquidation risk if Bitcoin falls.

Many of these positions are likely longs, meaning a pullback could trigger liquidations as price dips below key levels.

Open interest in Bitcoin futures has surged to around $57.4 billion, pointing to heavy involvement from institutional investors rather than speculative retail. Just this month alone, approximately $3.4 billion flowed into Bitcoin ETFs, including a record $2.2 billion over two days. This is further evidence of institutional confidence.

On the other hand, funding rates are historically low (about 10% annualized compared to 80% in 2023), pointing to less leveraged, more sustainable positions. 

Also, the leverage ratio (futures versus exchange balances) has dropped as well…

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