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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

Bitcoin Open Interest Remains Elevated Post Dramatic Dip

Keshav Verma
Keshav Verma
1 year ago
3 mins read
Bitcoin

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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.

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:

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
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Keshav Verma
Keshav Verma

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Read more

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

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