According to a CoinGlass report, the Bitcoin (BTC) derivatives market reached a new high, with Bitcoin futures holdings (OI) hitting a record high on October 21, reaching $40.5 billion. Data shows that the Chicago Mercantile Exchange (CME) accounts for the largest share of Bitcoin futures holdings, reaching 30.7%. Followed by Binance, accounting for 20.4%, and Bybit, accounting for 15%.

The surge in open interest coincides with Bitcoin’s price approaching the $70,000 mark. Open interest refers to the total value or number of futures contracts that have not yet expired. It is an important indicator of market activity and investor participation in the Bitcoin derivatives market.

An increase in open interest may mean increased leverage within the system, which may lead to increased market volatility. During periods of high open interest, significant market movements often occur when market prices fluctuate violently. This situation may trigger continuous forced liquidation, leading to passive selling in the spot market, and then triggering a sudden drop in the price of Bitcoin.

A similar incident occurred in August, when Bitcoin prices plunged nearly 20% in just two days, falling below $50,000. On October 21, Bitcoin reached $69,380 in early trading, but encountered resistance and pulled back to approximately $69,033.

According to CoinGecko data, Bitcoin is still 6.4% away from its all-time high of $73,738. Additionally, altcoins such as Ethereum and Solana have outperformed Bitcoin in recent intraday gains – Ethereum is up 3.5% to hit $2,750, while Solana is up 6%, approaching $170. Both have retreated slightly after hitting recent highs.

Bitcoin rose to a three-month high as markets anticipated the upcoming U.S. presidential election on November 5. Polls show former President Trump's chances of winning the election are increasing, which has boosted the dollar.

His tariff and tax policies are expected to keep U.S. interest rates higher, potentially weakening the currencies of trading partners. The rising odds of a Trump victory have given Bitcoin a significant boost, as his administration is seen as taking a more relaxed approach to cryptocurrency regulation. On the Polymarket platform, Trump's approval rating relative to Harris's was 61% to 38%.

Chris Weston, head of research at Australian online broker Pepperstone, told CNBC that with only 15 days left before the election, traders face the key decision of whether to increase election-related trading. Weston suggests that the best way to hedge against Trump's tariffs is to take a long position in the U.S. dollar against the euro, Swiss franc and Mexican peso.

Brad Bechtel, global head of foreign exchange at Jefferies, held a similar view, emphasizing that rising real interest rates are driving the dollar's strength, especially relative to these currencies.