Bitcoin prices momentarily breach $28,000 amid resurging interest
Yahoo Finance's David Hollerith breaks down the latest moves in bitcoin as investor fears over the banking system swirl.
DAVE BRIGGS: Bitcoin rising over the past week amid fears of contagion in the traditional banking system. And with the rise of Bitcoin price comes some of the familiar traits in crypto trading like increased leverage. Our David Hollerith here to break it all down. David, we see Bitcoin up nearly 15% over the last five days. What's happening here below the surface?
DAVID HOLLERITH: Yeah, Dave, I mean, the question about why people are buying is going to continue to be debated, about whether or not it has to do with the Federal Reserve loosening their rate hike decision on Wednesday, or it has to do with the banking system and the fact that Bitcoin is just completely separated. But in the derivatives market, traders have been placing bets in the futures market at an elevated rate, a rate that has not been seen. It's only been seen one other time-- excuse me-- since November.
And then also, in the options market, Deribit, which is sort of the main options platform for betting on which way Bitcoin will go, has sort of seen a surge in contracts over the last week. It's an all-time high as far as the amount of open interest they've seen go into their contracts. So what we're seeing is a lot more leverage building in the system right now. And we don't know which way that leverage is positioned. So if we look at an outbreak, at least in the futures market, it looks about 51% long, 48%, 49% short. But we don't really-- whatever happens to the downside or the upside, that obviously might be decided on Wednesday.
I'll also point to the fact that in the futures market, there's a very large amount of futures contracts set to expire at the end of this month. So that's another thing to watch. And obviously, the bulls, from how they're positioning their strike prices, are looking at the $30,000 mark for the target for where they're expecting Bitcoin to be around that time.
DAVE BRIGGS: It sure would be interesting to see another surge. David Hollerith, appreciate that. Thanks so much.