Tag: Bitcoin Open Interest

Following Crash, Bitcoin Open Interest Declines To Sept 2021 Levels

by NEWSBTC

Following the crash to $35k, the Bitcoin open interest has declined to September 2021 levels. This may suggest that the market volatility will be lesser in the near future.

Bitcoin Open Interest Drops To Similar Levels As In September 2021

As pointed out by an analyst in a CryptoQuant post, the BTC open interest has decreased to similar levels as last September following the crash.

The “open interest” is an indicator that measures the total amount of Bitcoin futures contracts currently open in the derivatives market. The metric accounts for both long and short positions.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

When the value of the indicator increases, it means more money is entering into the derivatives market as investors open more positions.

The volatility in the price of Bitcoin usually rises in such scenarios as it implies leverage in the market is going up, and so a liquidation squeeze may be coming.

On the other hand, when the open interest declines in value, it means holders are closing up their futures positions. The resulting lower leverage environment usually leads to lower price volatility.

Get 110 USDT Futures Bonus for FREE!

Related Reading | Bitcoin Diamond Hands: Despite Recent Fear, Coins Aged 12-18 Months Rise To 2-Year High

Now, here is chart that shows the trend in the Bitcoin open interest since the May of last year:

Bitcoin Open Interest

The value of the indicator seems to have gone down recently | Source: CryptoQuant

As you can see in the above graph, the Bitcoin open interest has declined after the crash in the price of the crypto to $35k.

Similar behavior was also seen during two other instances in the last six months, where a crash in the BTC price wiped out some open interest.

Related Reading | Market May Be Suffering But Bitcoin And Ethereum Will Pull Back Stronger, Bloomberg Analyst

During all these instances, it seems long liquidations were at play to amplify the slide in the crypto’s price. Now, the Bitcoin open interest is at the same level as September 2021.

Ethereum’s open interest has also dropped significantly since its ATH, and is now the lowest since last Sept. The below chart highlights this trend.

Ethereum Open Interest

Looks like the ETH open interest has also observed a reset | Source: CryptoQuant

As the open interest values are now relatively lower, the quant believes volatility should also be lesser in the near term.

BTC Price

At the time of writing, Bitcoin’s price floats around $33.3k, down 21% in the last seven days. Over the past month, the crypto has lost 34% in value.

Here is a chart that shows the trend in the price of BTC over the last five days:

Bitcoin Price Chart

Looks like BTC's price has shown sharp downtrend in the last few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

Source

Tagged : / / / / / /

Bitcoin Open Interest Continues To Rise, Short Squeeze Incoming?

by NEWSBTC

On-chain data shows Bitcoin open interest and estimated leverage ratio metrics have continued to rise recently. This could mean that a short squeeze may be coming soon.

Bitcoin Open Interest Rises Despite Decline In Price

As pointed out by an analyst in a CryptoQuant post, the BTC open interest has shown uptrend over the past month, despite the price of the crypto moving down.

The “open interest” is an indicator that measures the total amount of Bitcoin futures contracts that are currently open in the market.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

When the value of the metric moves up, it means more investors are opening long or short contracts on derivative exchanges. This may mean that leverage is going up in the market, and thus such a trend can lead to higher volatility in the price of the crypto.

On the other hand, a decline in the metric suggests holders have started to close their positions. A plunge in the indicator happens when Bitcoin makes a strong price swing, forcing mass liquidations of the contracts.

Such liquidations cascade together and amplify the price move. This event is called a long or short squeeze, depending on which contracts make up the majority.

Get 110 USDT Futures Bonus for FREE!

Related Reading | Bitcoin Fear And Greed Index Has Dipped To Lows Not Seen Since July

Now, here is a chart that shows the trend in the Bitcoin open interest over the past year:

Bitcoin Open Interest

The indicator's value seems to be trending up | Source: CryptoQuant

As you can see in the above graph, the Bitcoin open interest has been going up, despite the price moving down. This is different from the trend around the $69k top as there longs made up the majority and hence the open interest followed the price.

Related Reading | Why Bitcoin Could Frustrate Bulls And Bears In 2022

The higher percentage of futures contracts looks to be short holders this time as the indicator has been moving opposite to the price.

BTC Estimated Leverage Ratio Continues To Reach New Highs

Another metric, the “Estimated leverage ratio,” measures the average amount of leverage that each futures holder is making use of.

This indicator has been making new highs recently, suggesting that short holders are taking a lot of leverage risk right now. The below chart shows this trend.

Leverage in the market moves up | Source: CryptoQuant

Such a large amount of leverage has historically lead to a flush sooner or later. And since this time the derivatives market is dominated by short holders, a short squeeze event could take place.

At the time of writing, Bitcoin’s price floats around $41.6k, down 12% in the past week. Below is a chart that shows the trend in the price of BTC over the last five days.

Bitcoin Price Chart

BTC's price has moved sideways in the last few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

Source

Tagged : / / / / / /

Bitcoin Open Interest Reaches Dangerously High Values, Leverage Flush Coming?

by NEWSBTC

On-chain data shows Bitcoin open interest has reached dangerously high values, a sign that a leverage flush may be coming soon.

Bitcoin Open Interest Rises To High Values

As pointed out by an analyst in a CryptoQuant post, the BTC open interest has now reached values where mass liquidations have taken place in the past.

The “open interest” is an indicator that measures the total amount of BTC futures positions currently open on derivatives exchanges. The metric accounts for both long and short positions.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

When the value of the metric is low, it means investors aren’t using much leverage right now. Such values usually result in low volatility in the price of Bitcoin.

On the other hand, high values of the indicator suggest that futures contract users are currently using a high amount of leverage. This situation can lead to high volatility in the market as big price swings can result in a liquidation squeeze.

Related Reading | Exchange Whale Ratio Suggests Bitcoin Dump Incoming

Get 110 USDT Futures Bonus for FREE!

Now, here is a chart that shows the trend in the BTC open interest over the past year:

Bitcoin Open Interest

The indicator's value seems to be on the rise recently | Source: CryptoQuant

As you can see in the above graph, value of the Bitcoin open interest looks to be climbing up in the last few weeks.

The quant has marked in the chart the previous times the indicator showed similarly high values. It’s clear that at some point after reaching these values, the metric has had a sharp decline.

The sudden decrease in the open interest implies that a leverage flush took place at those times. Such a squeeze happens when liquidations cascade together in response to a swing in the price of Bitcoin.

During such leverage flush incidents in the period of the chart, the price of the crypto also seems to have crashed alongside it. This means that those previous liquidations mostly involved long positions.

Related Reading | Why Did China Ban Bitcoin Mining? Here Are The Seven Leading Theories

Since the market seems to be overleveraged right now as hinted by the open interest values, it’s possible a similar liquidation event could take place in the near future.

BTC Price

At the time of writing, Bitcoin’s price floats around $46.7k, down 5% in the last seven days. Over the past month, the coin has lost 12% in value.

The below chart shows the trend in the price of BTC over the last five days.

Bitcoin Price Chart

BTC's price seems to have struggled in the last few days | Source: BTCUSD on TradingView

In the past week, Bitcoin seems to have again started consolidating in the $45k to $50k range. It’s unclear at the moment when the coin may escape this sideways movement, but if the open interest is anything to go by, a liquidation event may happen soon.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

Source

Tagged : / / / / / /

Bitcoin Bullish Signal: Open Interest Shows Strong Trend Up

by NEWSBTC

After heavily decreasing during the 4th December crash, the open interest finally seems to be making a return as it gains strong upwards trend.

Bitcoin Open Interest Shows Strong Upwards Movement

As pointed out by a CryptoQuant post, the BTC open interest has reversed its trend, and is now showing sharp movement up.

The “open interest” is an indicator that measures the total amount of futures contracts still open at the end of any trading day on derivatives exchanges. The metric takes into account both long and short positions.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

When the value of this indicator moves up, it can mean market volatility is rising. An increasing open interest may also support the current overall price trend. However, very large values of the metric can imply there is an excess of leverage in the market, which may end up leading to a correction in the price of the crypto.

On the other hand, a decreasing open interest value can result in lower market volatility. When the indicator sharply moves down, it can lead to a short or long squeeze due to the sudden price movement (the reverse can also be the case).

Related Reading | Bitcoin Whale Address Containing $11 Million Activates After 9-Year Dormancy

Get 110 USDT Futures Bonus for FREE!

Now, here is a chart that shows the trend in the Bitcoin open interest over the past month:

Bitcoin Open Interest

Looks like the indicator has started moving up recently | Source: CryptoQuant

As you can see in the above graph, during the 4th Dec crash, the value of the Bitcoin open interest sharply dropped off.

The indictor showed some recovery shortly after, but soon the curve started to flatten. However, recently, the metric has shot up and shown some strong uptrend.

Related Reading | Sharply Dropping Bitcoin Reserves May Suggest Return To Bullish Trend

This trend may mean that whales are now returning to the Bitcoin derivatives market, which can be bullish for the price of the crypto.

BTC Price

At the time of writing, Bitcoin’s price floats around $48.8k, up 3% in the last seven days. Over the past thirty days, the coin has lost 18% in value.

The below chart shows the trend in the price of BTC over the last five days.

Bitcoin Price Chart

BTC's price might have started to recover | Source: BTCUSD on TradingView

For a while now, Bitcoin has mostly showed sideways movement as the coin has been stuck between the $45k and $50k price levels. However, today BTC seems to have shifted to some strong uptrend.

But since the price is still below $50k, it’s unclear at the moment whether this change of trend can help BTC break out of this consolidation. If the open interest is anything to go by, the signs seem to be bullish.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

Source

Tagged : / / / / /

Bitcoin Open Interest Remains Elevated Post Dramatic Dip

by NEWSBTC

Data shows Bitcoin open interest has remained high despite the dramatic sell-off that occurred a few days back due to fud from the new COVID variant.

Bitcoin Open Interest Remains High Following The Sell-Off

As per the latest weekly report from Arcane Research, the BTC open interest hasn’t fallen much in the past few days. This is despite the recent sell-off triggered by fresh fud from the new Omicron COVID variant.

The “open interest” is an indicator that measures the amount of Bitcoin derivative contracts open at the end of a trading day.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

High values of the metric can mean there is excessive leverage in the market. This could lead to higher volatility in the price of the cryptocurrency.

On the other hand, low values of the open interest may lead to lesser volatility as there isn’t much leverage in the market.

Now, here is a chart that shows the trend in the value of this Bitcoin indicator over the past year:

Get 110 USDT Futures Bonus for FREE!

Bitcoin Open Interest

Looks like the open interest has been very high recently | Source: The Arcane Research Weekly Update - Week 47

As you can see in the above graph, the value of the Bitcoin open interest has remained quite high recently, despite the crash.

The metric has been trending down when measured in the USD, but it has remained above a certain level when denominated in BTC.

Related Reading | Bitcoin Aims Fresh Run To $60K, Why Bulls Could Face Hurdles

Currently, the Bitcoin open interest sits around $22 billion, or 380k BTC. This is a high value when compared historically.

Also, as the chart shows, the indicator’s value has remained above 365k BTC for more than a month now. It’s uncommon that these kind of high values are sustained for such a long time. As the report notes, this could mean the market currently has a lot of excess leverage.

Related Reading | Exchanges See Bitcoin Outflows For 7th Straight Day As BTC Price Begins Recovery

The graph also has curves showing the share of the major derivatives exchanges out of the total Bitcoin open interest.

Following the launch of the futures-based ETF, CME’s share in the market saw a sizeable drop. However, yesterday the exchange’s share saw a sharp increase, and now its open interest share sits at 20%.

Bybit’s open interest has seen significant growth recently. The report suggests that spikes in this exchange’s share have previously lead to sharp price fluctuations in Bitcoin so it might be worth paying attention to the upcoming trend of the exchange’s open interest.

BTC Price

At the time of writing, Bitcoin’s price floats around $57.3k, up 1.3% in the last seven days. The below chart shows the trend in the price of BTC over the past five days.

Bitcoin Price Chart

BTC's price shows recovery from the crash | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research

Source

Tagged : / / / / /

Institutional Bitcoin Open Interest Plummets, But Why?

by NEWSBTC

Institutional investors had FOMO’d into bitcoin with the release of the first Bitcoin ETF. This enthusiasm quickly died down the week following the approval as trade volumes plummeted. The record opening was quickly replaced by lackluster momentum that saw institutional investors pull out of the market, likely owing to the asset touching a new all-time high and traders taking gains.

institutional Bitcoin open interest had skyrocketed with the price, signaling the entrance of big money into the market. The run-up had lasted until the very end of October. Open Interest saw its peak on October 29th. But since then, institutional bitcoin open interest has been on the decline, thanks to dying interest in the bitcoin ETFs. Now the market looks towards Spot Bitcoin ETFs as open interest dies down.

institutional Bitcoin Open Interest Declines

institutional bitcoin open interest had grown a whopping 185% in October alone. The approval of the ProShares Bitcoin Futures ETF had been the major push behind it. Traders had massively betted on the success of the ETF and their bets had paid off as the ETF saw more than $1 billion in trading volume in the first two days alone. Open Interest had climbed in this period.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

Related Reading | Bitcoin Breaks Above $68,000, Where Does It Go From Here?

Open Interest has however declined in November. Although bitcoin has done well at the beginning of the month, institutional interest has not followed this trend. Instead, the CME has seen declining volumes for the month of November.

Chart showing bitcoin open interest decline

Get 110 USDT Futures Bonus for FREE!
Bitcoin Open Interest declines on CME | Source: Arcane Research

Open Interest on the CME had hit $5.9 billion but quickly declined down to $4.8 billion. Subtracting the contribution of the ProShares ETF to this volume, the number drops significantly to $3.4 billion.

Open Contracts Drop On CME

Open contracts on CME have also recorded a decline in recent times. The number of open contracts on the CME has dropped significantly from its peak on October 25th. However, this decline has not been replicated across other markets.

Bitcoin price chart from TradingView.com

BTC rallies to new ATH | Source: BTCUSD on TradingView.com

BITO has seen a surge in open contracts. While open contracts on the CME have declined by 32% since October, the number of open contracts in BITO has hit a record high. Presently, there are 4,139 open contracts, representing a new all-time high.

Subtracting the BITO open contracts from the CME open contracts sees a 45% decline in open contracts since October. This suggests that institutional investors are reducing their activities in the market and are not as involved with open contracts.

Binance Open Interest On The Rise

Bitcoin Open Interest in Binance has been growing lately, a direct opposite of what has been witnessed with open interest on CME. Open Interest on the crypto exchange hit a new all-time high in November. Open Interest had peaked on Binance in April at $5.2 billion. Now, open interest has grown on the platform from to new high of $6.7 billion.

Related Reading | What Is The Final Push For Bitcoin? MicroStrategy CEO Michael Saylor’s Big Reveal

The clamor for more exposure to BTC on the part of institutional investors has now died down. It is apparent now that trades made in the Bitcoin Futures ETF were mostly short-term and now those traders have pulled out of the market after taking profits.

Featured image from CNBC, chart from TradingView.com

Source

Tagged : / / / / / / /
Bitcoin (BTC) $ 43,918.77 0.04%
Ethereum (ETH) $ 2,351.57 0.67%
Litecoin (LTC) $ 77.22 1.09%
Bitcoin Cash (BCH) $ 255.35 2.48%