Bitcoin open interest hits a record as bulls drive BTC price to new highs

On May 20, the total open interest in Bitcoin futures reached a record high, prompting concerns about the jeopardy of bearish bets. Bitcoin may reach a new all-time high due to the sheer volume of leveraged holdings, even though it has failed to break above the $107,000 mark several times since May 18.

The total open interest in BTC futures rose to $72 billion from $66.6 billion in just a week, marking an 8% increase. The major driver for this continues to be the Institutional demand of the currency. The major holders of the open interest are the Chicago Mercantile Exchange (CME) at $16.9 billion followed by Binance, at $12 billion.

Bearish Bitcoin liquidations totaling $1.2 billion cluster between $107,000–$108,000

As estimated by CoinGlass, the concentration of BTC futures liquidations cluster around $107,000 to $108,000, totalling to approximately $1.2 billion.

There is increasing optimism linked to growing concerns about the US fiscal deficit, even though it is impossible to forecast what may cause a breakout over $108,000 to compel those leveraged shorts to unwind. There is still uncertainty over the government's strategy for achieving economic development while cutting spending, particularly given the continuous dispute between Republican and Democratic members.

Additionally, the US Treasury that dates back to 20 years remains around 5%, raising from 4.82% in the past two weeks. The US Federal Reserve might step in as a buyer due to the demand for long-term govt. debt as the last resort to maintain market stability. This approach, reversing the trend for the past 2 years, will put pressure on the US dollar and drive investors to seek alternative hedging strategies. 

While Bitcoin absorbs flow amid reserve reallocations, Gold still dominates

Although gold is still the most popular alternative asset, many investors find it less appealing due to its $22 trillion market valuation and 24% year-to-date gains in 2025. For comparison, US bank deposits and Treasury notes (M1) are worth $18.6 trillion, whereas the entire S&P 500 index is worth $53 trillion. On the other hand, Bitcoin is currently worth $2.1 trillion, which is about the same as silver.

The US and other countries are reportedly preparing to convert some gold reserves to Bitcoin, potentially driving its price to a new record high. A mere 5% shift from gold to Bitcoin by these nations could inject $105 billion (or one million BTC at $105,000 each) into the cryptocurrency.

To put things in perspective, Michael Saylor's US-listed company - Strategy holds 576,230 BTC. Without a question, institutional purchasing continues to be the key driver behind Bitcoin's rise past the $108,000 mark. The push to a new all-time high would probably be accelerated by such a move, which would cause the liquidation of highly leveraged bearish holdings. However, general market mood is still impacted by ongoing macroeconomic uncertainty.

As Bitcoin approaches the $107,000 mark, short sellers are at an increased risk of forced liquidations, which could further accelerate price growth.