Bitcoin Open Interest Falls As Price Dips Below $31,000
June 09 2022 - 6:00PM
NEWSBTC
The bitcoin open interest over the past several weeks has been
interesting to witness. Surges and dips appeared and disappeared
just as quickly, usually following the price of the digital asset
itself. Last week was no different given the movement. The bitcoin
denominated open interest had plunged after only hitting a new
all-time high the previous weeks. This suggests a sharp turn in the
sentiment of investors after the rollercoaster of the last week.
Bitcoin Open Interest Down 25,000 Back at the beginning of June,
Bitcoinist reported that a short squeeze may have been the reason
behind the rally that saw bitcoin climb about $30,000 in the last
days of May. This had been due to the fact that the open interest
had risen drastically to a new all-time high of 307,189 BTC at this
point. It was well-received in the market due to the fact that more
investors were plunged back into profit but it seems the market is
now retracing. Related Reading | U.S. Macro Pressure
Responsible For Entire Bitcoin Downtrend For the past week, the
bitcoin denominated open interest had been on the decline. The
result of this had been 25,000 BTC wiped off the market in the
space of seven days. This saw a sharp crash in the open interest
and like always, a similar movement had been recorded in the price
of the digital asset. The decline brought the total open interest
as of the close of market on Monday to 292,171 BTC. What followed
was a decline in the price of BTC back below $29,000. The value of
bitcoin has since returned but open interest had lagged. Open
interest takes a nosedive | Source: Arcane Research It is
interesting given that the open interest had hit another all-time
high on Monday evening just before the crash. It had beaten the
previous week’s high to touch 317,734 BTC before the crash. Given
that the same trend was recorded the prior week, it suggests
investor sentiment remains unstable. Checking The Boards The most
significant decline in the bitcoin denominated open interest was
recorded on the FTX crypto exchange. Most of the drop had
originated from here where the exchange had seen open interest fall
by 15.5% in just four hours. This would then be followed by other
crypto exchanges, although to a lesser degree. Binance which is the
leading cryptocurrency exchange in the space saw open interest fall
by 10.6% in the same time period. It was closely followed by the
Bybit crypto exchange, which saw 9.1% wiped off its open interest
in a total of four hours. BTC loses momentum ahead of US trading
hours | Source: BTCUSD on TradingView.com Interestedly enough,
Bybit which had recorded the lowest drop in open interest had seen
the most impact on its funding rates. Despite that of Binance and
FTX being larger, it was Bybit traders who saw a capitulation event
to a worse degree. Related Reading | Bitcoin Miner Revenues
Stay Low As Price Decline Continues Open interest is expected to
recover through the next week given the interest in bitcoin
perpetuals. However, the probability of the digital asset holding
high remains low given recent trends. Featured image from
SciTechDaily, charts from Arcane Research and TradingView.com
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