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Bitcoin: good Monday for pioneer crypto as open interest explodes

The price soared to an intraday high of $27,414 before retracing.

Bitcoin in September hasn’t always been good news. But the benchmark cryptocurrency broke the $27,000 mark today in a move to regain losses from the last few weeks.

Bitcoin rekindles hope

BTC price surged past the $27,000 mark earlier on Monday to break past the key resistance.

The price soared to an intraday high of $27,414 before retracing.

The move showed a rekindling of hope by the benchmark coin before it fell back to the $26k levels. At press time, the coin is trading at $26,773, after gaining 0.90% in the last 24 hours.

“Bitcoin price breaks the barrier at $26,800 and attacks the highs at $27,200,” Michaël van de Poppe, founder and CEO of trading firm Eight, summarised. “Trend looks like to be upwards from here, as altcoins are also waking up. Still the best period to buy your assets.”

The reason for the move isn’t clear. But the rise has been associated with a spike in volume during the opening hours in the Asian market. The spike was a reaction to a report over the weekend that the Japanese government plans to allow startups sell digital tokens to venture capital funds in addition to conventional assets like shares and stock options.

Read more: SEC says Binance has refused to cooperate in latest court filing on violation of securities law

Open interest explodes

The total number of open Bitcoin futures contracts across all derivative exchange platforms is tracked by the “Open Interest” indicator.

When this metric’s value increases, it indicates that investors are currently opening fresh positions on the market. When this occurs, the cryptocurrency is typically more likely to exhibit volatility because new contracts typically suggest an increase in the sector’s overall leverage (“leverage” being, obviously, the loan amount holders can choose to take against their positions).

The graph shows that Bitcoin open interest has shown an increase that signalled the cross of $27,000.

Looks like the value of the metric has shot up over the past day | Source: CoinGlass

The indicator had a value of $11.04B prior to this growth, but it has now surpassed $12.81B, indicating an enormous gain of $1.77B (about 16%).

The asset may naturally become more volatile as a result of the Open Interest’s quick rise, albeit it is difficult to predict which direction this volatility will manifest.

Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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