Bitcoin approaches $72,000 as increasing open interest indicates heightened leverage in volatile market conditions.

BTC increases alongside equities as rising open interest and diminishing volatility indicate leveraged positioning, despite ongoing rejections near $72,000.

Bitcoin price chart (TradingView)

Key points:

• Bitcoin is once again approaching the $72,000 mark, but frequent rejections have caused traders to establish short positions, resulting in futures open interest reaching a one-week peak.
• Ether and various other altcoins exhibit stronger bullish trends, with ETH open interest at several-month highs and DeFi and AI tokens outperforming BTC.
• Decreasing implied volatility and a softening put skew indicate diminishing geopolitical risk concerns, even as macroeconomic news remains prevalent.

Bitcoin BTC$71,524.81 increased by 1.2% shortly after midnight UTC, reflecting upward movement in U.S. equities, with Nasdaq 100 futures rising by 1% during the same timeframe.

This increase follows a decline in oil prices below $100 per barrel on Tuesday after U.S. President Donald Trump suggested a “15-point plan” to conclude the conflict in Iran, although Iranian officials dismissed his remarks as misinformation.

The cryptocurrency market shows resilience against the conflict, consistently outperforming traditional safe-haven assets like gold and silver since early February.

Bitcoin has crossed the $72,000 threshold twice this month, each time followed by a sell-off that drove prices down to between $67,000 and $65,000.

Traders are initiating short positions around this level, leading to a significant rise in open interest.

Segments of the altcoin market are outperforming bitcoin, with decentralized finance (DeFi) tokens LDO and ETHFI appreciating between 2.5% and 3.5% since midnight.

Derivatives positioning

• Overall crypto futures open interest (OI) rose to a one-week high of $112 billion.
• The top 10 tokens, including BTC and ETH, all recorded increases of 4% or more in futures open interest over the last 24 hours.
• Ether OI surged to 14.55 million ETH, the highest since August 24. This, combined with favorable funding rates and cumulative volume delta, indicates rising demand for bullish positions or longs.
• DOGE and ZEC are also notable tokens with OI increases exceeding 10% in a day.
• Bitcoin’s 30-day implied volatility index, BVIV, has decreased for the third consecutive day, approaching a weekly low of 53%, suggesting a waning geopolitical risk premium. Ether’s volatility is also showing a downward trend.
• On Deribit, the put skews for BTC and ETH continue to soften, although overall pricing still reflects downside concerns across all durations.
• Friday’s multibillion-dollar expiry indicates $75,000 as a potential target, with the max pain theory suggesting a possible rebound toward that figure.

Token discussion

• The CoinDesk Computing Select Index (CPUS) is the top-performing benchmark on Wednesday, rising by 1.9%. The bitcoin-centric CoinDesk 20 (CD20) saw an increase of 0.9% during the same timeframe.
• The CPUS Index comprises AI tokens TAO and FET, as well as chainlink LINK$9.3852, which constitutes 62% of the index’s weighting.
• LINK has risen by 1.5%, while TAO and FET have seen increases of 4.9% and 2.9%, respectively.
• CoinMarketCap’s “Altcoin Season” indicator remains at 48/100, indicating a bullish sentiment after previously languishing around 22/100 for much of February.
• Conversely, privacy coins XMR and ZEC have declined, each losing about 1% as traders shift between altcoin sectors in anticipation of a potential breakout.