According to crypto analysis platform CoinGlass, Bitcoin open interest (OI) has continued to rise despite recent price declines, suggesting that the cryptocurrency may still have more room to fall.
CoinGlass highlighted in an Aug. 16 post on X that it is “a bit unusual” for open interest to remain high while Bitcoin prices have been dropping. The platform reported that total OI on Bitcoin futures hit $29 billion on Aug. 16, increasing throughout the week even as spot BTC prices fell by 5% in recent days.
Open interest refers to the total number of unsettled or unexpired Bitcoin futures contracts. An increase in OI indicates more leverage in the market, which can intensify price movements in either direction. For instance, on Aug. 5, a leverage flush caused Bitcoin to drop by 20% in less than a day.
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CoinGlass data also shows that funding rates were negative. In crypto derivatives markets, negative funding rates occur when the contract price is below the spot price of the underlying asset. This situation may discourage traders from holding long positions, as they incur costs to maintain them, while short positions become more appealing.
Additionally, a crypto options expiry event is set to take place at the end of the week. On Aug. 16, about 24,000 BTC contracts, valued at $1.4 billion, will expire, according to Deribit. However, these expiries usually have limited impact on spot markets, with large leverage buildups exerting more influence when cleared.
Over the past 12 hours, Bitcoin prices have declined by 3%, with the asset trading just above the $58,000 mark early on Friday, Aug. 16.
Cre: cointelegraph
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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