Bitcoin (BTC) recovered its liquidity on the futures market, with rapid inflows following Easter weekend. The spot market also regained its liquidity almost overnight, as BTC climbed and held above $87,000.Â
After a few quiet days, open interest for Bitcoin (BTC) recovered on the futures markets. In less than 36 hours, the market added $2.4B in new liquidity following a relatively inactive weekend. The inflow showed enthusiasm for BTC, in expectation of new price moves.Â
Open interest is on a roll
Open interest on all exchanges, including CME, rose by 1.8% in the past 24 hours. Binance positions increased by 2.36%, reflecting the overall readiness of traders to renew leveraged positions. The recent recovery showed the market is still agile, compensating for the crash at the end of March, when open interest dipped by 43% from its all-time high.Â
In March, BTC lost its previously accrued positions on the CME, for the biggest unwinding of trades in Q1. Open interest has been recovering since March 11, with a week of rapid liquidations and fearful sentiment. The current open interest is back to the levels from around March 25, showing BTC was capable of rebuilding liquidity in days.
Open interest as measured by crypto exchanges rose from lows of $24B over the weekend to over $27B, with relentless growth since April 21. As a result, Bitcoin rallied to a new price range, boosting hopes of a more lasting recovery. BTC traded at $88,553.87, as sentiment started recovering from fearful to neutral.Â
The other sign of potential recovery was the increased activity on the Bitcoin spot market. In the new week, BTC spot volumes jumped from $2.9B to $8.08B, tripling in less than 36 hours based on Glassnode data.
The recent increase in spot volumes followed signs of whale accumulation, including the newest purchase by Strategy. Bitcoin is also accumulated by a cohort of new whales at a record pace, suggesting an outflow of tokens into corporate and national treasuries, as well as ETF and DeFi reserves.Â
Bitcoin futures point to a short squeeze
The recently increased open interest was highly targeted. A large part of the liquidity was deployed for short positions above $88,000.
Over $79M was deployed in the range of $89,225.79, signaling a potential short squeeze. The current price range sparked hopes for a recovery above $90,000. However, based on long positions, BTC may have another dip to the $87,000 range, liquidating up to $87.9M for the $87,238.42 price level.Â
The BTC leveraged market remains influential for determining the short-term price moves. Accumulation by whales continues in the background, collecting more coins in wallets with reserves of 1,000 to 10,000 Bitcoins. At the same time, retail buyers have moved away from the market due to its volatility and relatively unaffordable BTC price levels.Â
Bitcoin dominance remains at 61.4% as altcoins remain depressed. The current shift in trading focuses on BTC, as altcoins have shown they perform even worse during Bitcoin corrections.
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