According to data from Coinalyze, open interest in bitcoin (BTC), across crypto derivatives exchanges, has risen to $10 billion. This is a five-month high, after leverage subsided following November’s collapse of FTX.

Open interest is a measure that evaluates the value all unsettled derivatives positions. It is also used to confirm a move’s legitimacy. Bitcoin was trading around $30,000 at the time of writing after hitting a high of $30540 over 10 months on Tuesday.

Head of trading at Woorton, a cryptocurrency trading firm and liquidity provider said that bitcoin was exploding in a “global-risk-on environment.” The Nasdaq rose by 10% over the past 30 days.

Touag stated that technicals are behind this move. BTC broke a major resistance at 28.5k and rebounded along its 2023 bullish trendline.

He said that futures open interest was moving vertically, which indicates more participation by crypto traders and a bullish sentiment in the market.

“For the moment, we don’t see any signs of exuberance. In fact, the fear index is at 61. Funding rates on many BTC exchanges are still negative. Short-sellers have not yet given up. These metrics will be monitored to see if there is a trend change.

An increase in open interest indicates that short-sellers have increased their shorts in the region. However, traders who are betting on long trades with leverage may not be able to unwind if prices reverse.

According to CoinGlass, $98 million worth of crypto derivatives positions were liquidated within the last 24 hours. Bitcoin temporarily fell below $30,000 at that time.

UPDATE (April 10, 2023, 20:03 UTC): Updates quote attribution.

Edited and spelled out by Parikshit Moishra.