Surge in Bitcoin Futures Open Interest Indicates Growing Investor Confidence Amid Trade Deal Hopes and Powell’s Stance.

Bitcoin and Ether Lead Surge in Crypto Market on U.S.-China Trade Deal Optimism

Bitcoin (BTC) and ether (ETH) experienced impressive price gains on Tuesday, as expectations of a U.S.-China trade agreement bolstered investor sentiment. Alongside the price increases, the perpetual futures market saw a noticeable jump in open interest, signaling growing confidence among traders.

Bitcoin, the largest cryptocurrency by market capitalization, surged by 6.79%, approaching $94,000 for the first time since March. This represented the most substantial single-day percentage gain since April 9. Ether also posted strong gains, rising by 11% to reach $1,175, its best performance since early April.

The bullish price action was fueled by comments from U.S. Treasury Secretary Scott Bessent, who indicated a potential de-escalation in U.S.-China trade tensions. President Donald Trump further supported the optimism, announcing that tariffs on Chinese goods would be substantially reduced from the current 245% rate. Trump also clarified that he had no plans to remove Federal Reserve Chair Jerome Powell.

As prices surged, traders began actively participating in perpetual futures markets, with significant increases in open interest on exchanges such as Binance, Bybit, OKX, Deribit, and decentralized exchange Hyperliquid. The cumulative notional open interest for Bitcoin futures rose by 10%, hitting $17.83 billion—the largest single-day increase since March 2.

“Bitcoin’s open interest surged more rapidly than its price, with the majority of positions originating from Binance,” said Joao Wedson, CEO of Alphractal Research. “This suggests that volatility is likely to increase as the market adjusts.”

The price increase was likely amplified by a short squeeze, with traders unwinding their short positions in perpetual futures. Funding rates had been negative about 24 hours earlier, indicating a preference for short bets, which may have contributed to the recent price movement.

Ether’s open interest also saw a notable increase, jumping nearly 16% to $6.60 billion—the largest one-day increase since November 27.

The rising open interest combined with price increases supports the notion of continued bullish momentum for both Bitcoin and Ether in the short term.

Positive Funding Rates Confirm Bullish Sentiment

In addition to the surge in open interest, funding rates for Bitcoin and Ether reflect a positive market sentiment. The annualized funding rates for both cryptocurrencies range between 5% and 10%, signaling that traders are more willing to hold long positions.

Funding rates are the payments exchanged between traders with long and short positions in perpetual futures contracts. Positive funding rates indicate a bullish market, with traders paying fees to maintain long positions. While excessive funding rates can sometimes indicate speculative excess, the current rates remain moderate, suggesting a healthy level of optimism in the market.