Bitcoin is leading the crypto market higher, breaking out of a multi-month consolidation as it looks to retest its highest weekly close on record (~$60k). Excessive optimism and leverage typically serve as telltale signs that a material sell-off awaits, but so far we aren’t seeing indications that either is out of control.
Open interest across BTC perps and futures has rebounded since September’s decline but aggregate OI is still ~20% below its prior April high. Perp funding rates remain compressed, especially when compared to Q1 2021, which tells us the latest move higher still has room to run so long as the market can maintain some momentum. The growth in futures and perps volume highlights the growing importance of derivatives for price discovery, though spot volume is also on the rise too.
Institutional capital flows have started to pick up again, possibly in anticipation of an ETF approval, but we foresee this trend continuing as we head into year end. Bitcoi