Recent data shows that Bitcoin Open Interest (as a percentage) of its Market Cap has reached a low, which is an indication the derivatives market has been in good health.
Bitcoin Open interest is now less than 2% Market Capitalization
According to James Van Straten, an analyst in a recent article. post On X, derivatives have been viewed from the side of the market. “extremely healthy” BTC has experienced its latest recoveries.
Here, the key metric is “Open Interest” which counts the number of Bitcoin derivative positions open at all of the centralized exchanges.
If the indicator is increasing, this means investors are taking more positions right now. When such a trend occurs, total leverage on the market tends to rise, and the asset’s price could become more volatile.
In contrast, a decrease in the indicator suggests that the users are either reducing their position or their own The platform may liquidate their cryptocurrency at will or by force. After a significant drop, the cryptocurrency could behave more consistently.
Here is the chart showing the Bitcoin Open Interest trend over the last few years.
In recent days, the value of this metric has seemed to be decreasing | Source: @jvs_btc on X
On the graph, Open Interest (also known as the value of BTC at its current market price) is shown in percentages.
This would suggest that the indicator is showing a decline and has fallen below the 2 percent mark. It would appear that positions in the derivatives markets now represent less than 2% market capitalization.
The chart shows that earlier, the currency’s rise towards the top of the chart had spiked the indicator. new all-time high had taken place. This rally saw the market capital increase rapidly, yet the ratio continued to trend upwards, suggesting that the speculation was growing faster than the prices.
The overheating of the derivatives sector may be the cause. The ratio had fallen because investors were liquidating their positions in the aftermath of the peak.
The recent price decline had reset the markets further and brought down the ratio to levels that have not been seen since February. Bitcoin’s value has been increasing steadily. recovery effort In the last few days the derivatives markets has been cool. “Hard to be bearish here,” “, says the analyst.
The market’s health will be closely monitored in the days to come to see if it continues to show signs of optimism, thereby allowing the recovery to move forward.
BTC price
Bitcoin was previously above $65,500, but has now dropped to $64,100.
The price of this asset is on the rise over the past few days. Source:| Source: BTCUSD on TradingView
Featured image from André François McKenzie on Unsplash.com, Glassnode.com, chart from TradingView.com
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