Rising open interest in bitcoin futures indicates investor confidence in trades, Powell
Bitcoin and Ethereum prices surged on Tuesday as US officials looked to reach a trade deal with China.
Author: Omkar Godbole | Edited by: Sheldon Reback Updated: April 23, 2025, 4:04 PM Published: April 23, 2025, 8:29 AM
What you need to know:
- Bitcoin and Ethereum prices surged on Tuesday as US officials looked to reach a trade deal with China.
- Increased open interest in perpetual futures is helping to boost investor confidence.
- Positive funding rates indicate optimistic sentiment as traders are willing to pay fees to hold long positions.
On Tuesday, as Bitcoin (BTC) and Ethereum (ETH) continued to recover, the perpetual futures market saw an even stronger rise in open interest, demonstrating growing investor confidence as the Trump administration softened its rhetoric on trade tariffs and anti-Fed sentiment.
BTC, the leading cryptocurrency by market cap, rose 6.79% to nearly $94,000 for the first time since March, according to CoinDesk. That’s the biggest one-day gain since April 9. Ethereum’s blockchain token, ether, rose 11% to $1,1175, its best since April 2.
The rally began after U.S. Treasury Secretary Scott Bessent discussed reducing trade tensions between the U.S. and China, after which President Donald Trump said tariffs on Chinese goods would be cut substantially from the current 245%. Trump also said he had no plans to fire Federal Reserve Chairman Jerome Powell.
The price increase was driven by traders channeling funds into perpetual futures trading on major overseas exchanges, as evidenced by the notable increases in open interest on Binance, Bybit, OKX, and Deribit, as well as leading perpetual-focused decentralized exchange Hyperliquid.
Total notional open interest, or the dollar value of active bets on BTC perpetual futures, increased 10% to $17.83 billion, according to data from Velo. That’s the biggest one-day gain since March 2, when Trump mentioned XRP, ADA, and SOL as potential candidates for a strategic digital asset reserve that would include bitcoin and ether as the core. The administration later said it would keep bitcoin seized in enforcement actions as a reserve.
“Bitcoin open interest has been increasing faster than its price, with most of the positions being created on Binance,” Joao Vedson, CEO of Alphartal Research, told X. “The problem is that most of the positions are long, so we expect increased volatility in the coming hours.”
The price increase likely came from a reduction in short positions or the covering of short perpetual futures bets. Funding rates were negative about 24 hours ago, implying a bias towards short positions.
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