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Bitcoin (BTC), the largest cryptocurrency in the market, had been trading within a narrow range of $27,800 and $28,300. However, it has now broken out of this range and is regaining strength, even as investors await the outcome of the Federal Open Market Committee (FOMC) meeting. Regardless of how the FOMC meeting may impact Bitcoin, the options market has been crucial in driving the positive price action during the current rally. The surge in demand for Bitcoin options has created a strong market sentiment, fueling the uptrend that has seen BTC’s price rise by over 30% since mid-March. The notable rise in open interest in Bitcoin options, representing the total number of options contracts, has indicated a rising demand for BTC option products since the beginning of the rally.  Related Reading: Bitcoin To $1 Million? Why Hyperinflation Is Unlikely In The US Why Is There High Demand For Bitcoin? Recent data from Deribit, a derivatives exchange, reveals that the open interest in Bitcoin options has hit a record high. This indicates an increase in outstanding contracts, suggesting that more investors are using Bitcoin options to gain greater exposure to the cryptocurrency market.   The chart above shows that the total notional open interest in the cryptocurrency market has surpassed $20 billion, with Bitcoin accounting for $12.5 billion and Ethereum options accounting for $7.55 billion. The options market open interest last surpassed the $20 billion mark in October 2021, indicating a notable surge in demand for cryptocurrency options products in recent months. This has fueled the ongoing rally in the industry, which has helped overcome the difficult period of the crypto winter and the FTX collapse that spooked investors. The growing interest and activity in the cryptocurrency derivatives market, as evidenced by the increase in open interest in Bitcoin options and the total notional open interest in the market, directly impact Bitcoin’s price. Additionally, this increased interest and activity can attract more participants to the market, boosting liquidity and driving up the price of the largest cryptocurrencies. BTC Continues Its Bull Run Despite the uncertainty surrounding the FOMC’s interest rates decision, Bitcoin is trading at $28,700, having grown by over 2% in the last 24 hours. While many analysts have already priced in the Fed’s expected 25 basis point rate hike, research firm Blofin notes that only weekly implied volatility remains uncertain and has already started to decrease. Meanwhile, investors maintain a neutral-bullish stance. Bulls must maintain a position above the $28,600 resistance zone to validate the new bull cycle. If Bitcoin can end the day with a robust upward price movement and surpass $28,750, the largest cryptocurrency in the market will probably reach the $30,000 level in the short term. Overall, the increase in open interest in Bitcoin options shows the growing maturity of the cryptocurrency derivatives market, as more traders and investors seek to gain exposure to Bitcoin and manage risk using these products. Related Reading: Bitcoin Whale Activity Reaches Highest Weekly Levels Of 2023 Feature image from Unsplash, chart from TradingView.com