Over the past few days, Bitcoin [BTC] has seen a sharp increase in open interest even if its price has been stuck around $63,000.

Increased Open Interest frequently means more traders are utilizing futures contracts to join the market. Since these traders are speculating on the price of Bitcoin in the future, this might result in increased volatility.

Price movements might become more noticeable as bulls and bears compete when there is more money at stake. Although there may be financial possibilities due to this volatility, there is also a higher risk.

Additionally, a rise in Open Interest might enhance market liquidity for bitcoin. It is simpler to initiate and exit positions when there is a greater pool of buyers and sellers due to the higher number of existing Futures contracts.

The state of the Bitcoin market as a whole may benefit from this.

Data from Coinglass showed that there were more short trades taken against BTC than long positions. Whether the bears are correct in their calls is still to be seen.

The situation of Bitcoin ETFs is another element that can have an effect on BTC. As per the data from SoSoValue, on May 10, there was a net outflow of $84.6581 million from Bitcoin spot ETFs.

A $103 million net outflow occurred on a daily basis for Grayscale's GBTC ETF, a $12.4363 million inflow for BlackRock's IBIT ETF, and an inflow of $5.3039 million for Fidelity's FBTC ETF.

Long-term, the substantial inflows may have a favorable effect on the price of Bitcoin.

But things for Bitcoin were looking bad at the time of publication. The price of Bitcoin had dropped 3.4% on the previous day to $60,833.76, as a result. There had also been a 1.8% decrease in the volume that Bitcoin was trading at.

Surprisingly, when the price dropped, so did the Bitcoin long/short differential. This suggests that there were fewer long-term addresses containing Bitcoin.

The number of daily active addresses on the network has also significantly decreased over the past several days, indicating a decline in interest in the Bitcoin ecosystem as a whole. This might further depress the price of BTC.