Bitcoin and Ether Surge as Trade Deal Hopes Drive Investor Optimism, Futures Market Sees Spike in Open Interest

Bitcoin (BTC) and ether (ETH) saw notable price increases on Tuesday as renewed optimism surrounding a potential U.S.-China trade deal sparked a rally across the cryptocurrency market. The rise in prices was mirrored by a sharp increase in open interest within the perpetual futures market, signaling heightened investor confidence.

Bitcoin, the world’s leading cryptocurrency by market capitalization, jumped by 6.79%, reaching nearly $94,000, marking its highest level since early March. This represents the biggest single-day percentage increase since April 9. Ether, the second-largest cryptocurrency, followed suit with a robust 11% rise, climbing to $1,175—the highest it has been since April 2.

The surge in prices coincided with comments from U.S. Treasury Secretary Scott Bessent, who discussed the possibility of a de-escalation in U.S.-China trade tensions. Later, President Donald Trump reinforced the positive sentiment, announcing plans to significantly reduce tariffs on Chinese imports from the current 245% rate. Trump also made clear that he had no intention of firing Federal Reserve Chair Jerome Powell, further bolstering market confidence.

As the price of both BTC and ETH climbed, traders flocked to the perpetual futures markets, with open interest rising significantly across major exchanges such as Binance, Bybit, OKX, Deribit, and decentralized exchange Hyperliquid. Bitcoin’s open interest surged by 10%, reaching $17.83 billion, the largest single-day increase since early March.

“Bitcoin’s open interest surged faster than its price, primarily driven by long positions on Binance,” said Joao Wedson, CEO of Alphractal Research. “This suggests that the market is preparing for more volatility in the short term.”

The rally was likely amplified by a short squeeze, as traders unwound short positions in the futures market. Funding rates had been negative the day before, indicating a preference for short bets, which may have contributed to the sharp price movement.

Ether’s open interest also saw a significant rise, increasing by 16% to $6.60 billion—the largest single-day increase since November 27.

The combination of rising prices and increasing open interest points to a continuation of bullish momentum for both Bitcoin and Ether.

Positive Funding Rates Signal Bullish Outlook

In addition to the surge in open interest, the positive funding rates for Bitcoin and Ether confirm a bullish outlook. The annualized funding rates for both cryptocurrencies are in the range of 5% to 10%, indicating that traders are more inclined to hold long positions.

Funding rates are the payments exchanged between traders holding long and short positions in perpetual futures contracts. A positive funding rate suggests that there is more demand for long positions, which is typically seen as a sign of bullish market sentiment. While excessively high funding rates can indicate speculative excess, the current levels remain moderate, suggesting that the market is still in a healthy, optimistic phase.