Bitcoin on-chain metrics are flashing bullish signals. The cryptocurrency’s open interest just hit an all-time high, and demand is growing at a fast monthly pace.

Data from market intelligence platform CryptoQuant shows that bitcoin’s open interest has reached a record high of $19.8 billion. Pseudonymous analyst EgyHash said this points to a bullish sentiment among traders.

Besides the increased open interest, bitcoin funding rates have reached their highest positive levels since August. This is an indicator that the majority of the open interest is in favor of long BTC positions.

In addition, the positive trend in bitcoin funding rates signals a growing influx of liquidity and rising investor attention in the crypto space.

With growing liquidity generally comes an increase in demand. CryptoQuant’s head of research, Julio Moreno, noted during the weekend that there has been a spike in bitcoin demand, and it has been growing at the fastest monthly pace since mid-April 2022.

Demand Is Recovering

CryptoQuant CEO Ki Young Ju tweeted Tuesday that bitcoin’s apparent demand “is back.” Apparent demand refers to the difference between production and changes in inventory, that is, the difference between BTC mined and the supply that has been inactive for more than a year. He explained that if the inventory decrease exceeds production, demand is increasing.

It is worth noting that while demand is recovering, the momentum remains in negative territory, indicating that traders are still selling more than they are buying. However, the scale of this imbalance has eased.

This increase in demand is evident in the inflows into the United States spot Bitcoin exchange-traded funds (ETFs). Inflows into the ETFs doubled from $253 million on Friday to $555 million on Monday, with nine of the ten funds recording positive numbers for the first time in weeks.

U.S. spot Bitcoin ETFs could experience higher inflows in the coming weeks as more ETF investors plan to invest in crypto products. A recent survey by American multinational financial services company Charles Schwab revealed that roughly 45% of ETF investors are interested in crypto products and intend to invest in them soon.

Meanwhile, CryptoQuant has asserted in previous reports that higher demand is needed to push bitcoin’s (BTC) price to new highs. It remains to be seen how high the cryptocurrency can rally from its current price of $65,500 in the coming weeks.