A quant has explained how a pattern in the Bitcoin open interest that held during the past month now appears to be broken.
Bitcoin Open Interest Is Now Moving Against The Price
As explained by an analyst in a CryptoQuant post, the BTC price had earlier been rising along with increases in the open interest. The “open interest” here refers to an indicator that measures the total amount of Bitcoin futures contracts that are currently open on all derivative exchanges.
When the value of this metric goes up, it means that users are opening up more positions on the futures market right now. As leverage generally increases when this happens, the price of the asset may become more volatile following this trend.
On the other hand, the value of the indicator decreasing suggests the users are either closing up their contracts of their own volition or are being liquidated by their platforms currently. Such a trend may lead to the cryptocurrency’s price becoming more stable.
Now, here is a cha
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