Bitcoin Open Interest Takes Second Largest Dump Of 2021
08 Diciembre 2021 - 11:00AM
NEWSBTC
Bitcoin has recorded significant losses in just the first week of
December. The digital asset has taken some of the largest hits for
the year in just last week alone following liquidations over the
weekend. This has expectedly had a huge impact on the amount of
open interest in bitcoin. Following the dump, BTC denominated open
interest took a nosedive. The dip in open interest was significant
enough to near-record levels for 2021. With bitcoin losing more
than $10,000 in value, open interest had declined rapidly. This is
worrying given that open interest had dropped not too long ago and
another drop this time around does not spell good news for the
market. Related Reading | Majority Of Bitcoin Investors Got In
This Year, Says Grayscale Bitcoin Open Interest Records
Second-Largest Decline With the drop from $54,000 to as low as
$40,000 on some exchanges, open interest figures plummeted. The
liquidations of future positions opened the asset up to a cascade
of further liquidations and open interest dropped 26% in this time
frame. BTC dominated open interest volumes fell from 390,000 BTC to
330,000, as reported by Arcane Research. BTC Open Interests sees
shart decline | Source: Arcane Research Saturday saw the
second-largest daily drop in open interest as it lost 58,000 BTC in
one day alone. It is the largest decline in a six-month period as
the last time the market recorded such a sharp decline in open
interest was on May 19th, which admittedly recorded a larger
decline than that witnessed on Saturday. The drop in BTC
denominated open interest correlates with the drop in price. OI
(open interest) had peaked in April during the height of the first
bitcoin bull rally but has repeatedly failed to attain the same
high despite bitcoin recording a new high of $69,000 last month.
Another dip sends BTC price to $49K | Source: BTCUSD on
TradingView.com What Caused The Decline? Violent sell-offs in the
market following the bitcoin price crash had been the main culprit
behind the decline in open interest. The sell-offs greatly
deleveraged the market, leading to losses to the tune of billions.
Although the futures market has now been thrown into a healthier
state following the sell-off. Related Reading | Number Of
Bitcoin Lightning Network Nodes Jumps 23% In Three Months The
massive deleveraging saw crypto exchanges Binance and ByBit lose a
significant portion of their open interest share. Both exchanges
saw their shares of this market plunge 11% to its current position
at 30%. Binance recorded a 40% fall in OI on its platform and ByBit
recorded an even higher decline with a 45% crash in OI. Open
interest is now $3.3 billionaire and $1.6 billion respectively on
both exchanges. Bitcoin denominated open interest has not recorded
much recovery since the December 4th crash. Currently, open
interest sits at 325,000 BTC, about 5,000 BTC lower than the
330,000 crash point on Saturday. Featured image from The Spruce,
charts from Arcane Research and TradingView.com
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