During the latest crypto rally, Santiment said bitcoin’s climb toward $87,000 was accompanied by rising open interest and a sharp improvement in market sentiment. The increase matters because analysts said it showed greater trader participation and leverage, which could support further gains if spot demand remains strong but could also increase liquidation risks.

FOMO surrounding additional bitcoin gains hit its highest level since 2024, according to Santiment.

Traders increase leverage

Open interest across the crypto market rose 7.6% during the rally, reaching about $156 billion after a large wave of short liquidations, Santiment said.

Bitcoin open interest stood at $25.84 billion, while Ethereum and Solana open interest totaled $16.97 billion and $2.97 billion, respectively. Ethereum led the increase, with the metric exceeding $17 billion on Tuesday for the first time since January.

Open interest measures outstanding futures positions, so an increase alone does not determine the direction of subsequent price moves. However, analysts said simultaneous growth in an asset’s price and open interest indicates increased trader participation and greater use of leverage.

Nearly $648 million in crypto short positions were liquidated during the breakout, but total open interest continued to rise. Experts said that indicated new positions had quickly replaced those that were forcibly closed.

Short liquidations in the Ethereum market exceeded $120 million as the asset’s rally accelerated.

Santiment said elevated open interest could support further gains if spot demand remained strong. However, the firm warned that a pause in price growth combined with continued leverage accumulation could lead to another wave of liquidations.

Bitcoin FOMO reaches highest level since 2024

Santiment also recorded a sharp shift in crypto-market sentiment. Discussion of additional bitcoin gains and a continuation of the bullish trend significantly outweighed pessimistic sentiment, according to the platform.

The surge in optimism coincided with bitcoin’s move toward $87,000, which Santiment said was fueled by forced buying following short liquidations. Experts also noted substantial futures liquidations over 24 hours as total cryptocurrency trading volume increased 39%.

Santiment said the combination may have accelerated the price move while prompting traders who entered late to open new positions. The firm said the 7.6% increase in total open interest indicated that market participants were replacing liquidated positions with new leverage.

Santiment stressed that positive sentiment alone did not make a market reversal inevitable. However, it said a broad consensus favoring further gains had increased risks compared with the previous week, when trader sentiment was considerably more pessimistic.

CryptoQuant previously said bitcoin had risen to $85,000 while the Coinbase Premium was negative.

Source: Incrypted