Following the crash to $35k, the Bitcoin open interest has declined to September 2021 levels. This may suggest that the market volatility will be lesser in the near future. Bitcoin Open Interest Drops To Similar Levels As In September 2021 As pointed out by an analyst in a CryptoQuant post, the BTC open interest has decreased to similar levels as last September following the crash. The “open interest” is an indicator that measures the total amount of Bitcoin futures contracts currently open in the derivatives market. The metric accounts for both long and short positions. When the value of the indicator increases, it means more money is entering into the derivatives market as investors open more positions. The volatility in the price of Bitcoin usually rises in such scenarios as it implies leverage in the market is going up, and so a liquidation squeeze may be coming. On the other hand, when the open interest declines in value, it means holders are closing up their futures positions. The resulting lower leverage environment usually leads to lower price volatility. Related Reading | Bitcoin Diamond Hands: Despite Recent Fear, Coins Aged 12-18 Months Rise To 2-Year High Now, here is chart that shows the trend in the Bitcoin open interest since the May of last year: The value of the indicator seems to have gone down recently | Source: CryptoQuant As you can see in the above graph, the Bitcoin open interest ha...
