Bitcoin open interest hits a new high of 12 billion, what impact will this have on the market?

As of the time of writing, the price of Bitcoin has once again surpassed $57,000, having recovered from the drop below $47,000 a few weeks ago and reaching a new all-time high since Bitcoin’s drop on March 12, 2020.
A year ago, the price of Bitcoin plummeted to below $4,000, however, over the past 365 days, both the price and volatility of Bitcoin have increased and remain so.
Data from Skew suggests that Bitcoin's put/call ratio is leaning more towards the bearish side at press time. Two key things to consider here are that puts outnumber calls and Bitcoin's total open interest surpassed $12 billion, a new record. However, these two indicators further suggest that Bitcoin's price will rise in the current market cycle before the end of this week.

Earlier this week, put options and call options were almost equal. However, now that put options exceed call options, the selling pressure on Bitcoin may drop further. Based on Bitcoin's historical performance, this will bring positive news to Bitcoin, and its price is expected to exceed the $59,000 level.
Here, it is necessary for us to pay attention to the daily liquidity of Bitcoin options.

Significant changes in options flows are highlighted in the chart, but have had little impact on trading volume, which remains close to average with no notable gains observed over the past week.
Bitcoin trading volume has dropped from $1.4 billion to less than $500 million. However, due to the increase in institutional funds flowing into Bitcoin, Bitcoin inflows are expected to continue to increase. According to the latest data, Bitcoin ETFs currently hold more than 125,000 Bitcoins, while GrayScale holds 655,360 Bitcoins.
Regarding the liquidation of open positions, long positions were liquidated twice as much as short positions. Considering the liquidation of active positions and option price behavior, it is possible that the price of Bitcoin may also see a correction in the short term.
The last time a similar situation occurred in the put/call ratio, the price broke through its technical range. Currently, the price of BTC is quite close to its previous highest price, and there is still some distance to break through the latter.
After two weeks of prices being stuck below the $48,000 level, Bitcoin’s price has been range-bound below the $52,000 level. Increased volatility and institutional inflows played a key role in this breakout, and the same indicators are likely to play a similar role in the coming days.
Interestingly, Bitcoin market sentiment interacts with Ethereum’s market, so Bitcoin is not the only indicator we need to pay attention to in this options market. In particular, Ethereum and Bitcoin have a high correlation, and Ethereum options also mark price breakouts.
Ethereum is currently trading around $1,700, and the long-term bullish trend of Bitcoin and Ethereum may not change, however, the options market seems to be bullish on both currencies. (Blockchain Knight)