What signal Bitcoin is giving right now, is it bullish or is it bearish? As it barely reacted to the CME futures expiry of today. Bitcoin (BTC) futures expiry for today was lacklustre both in terms of volume and price impact. Open interest dropped by a mere $157 million, barely moving from its $5 B mark.

The most recent expiry of CME Bitcoin futures was irrelevant. Some August contracts worth of $125 million were set to liquidate today, although preliminary data indicates less than $40 million were not rolled over for the upcoming months.

bitcoin
Total Open Interest, USD Million
Image Source – Coin Telegraph

The above chart shows the total open interest change over the past 24-hours. However, the data involves inverse swaps (perpetual) and the remaining calendar months. Nevertheless, this is totally opposite from the July expiry when futures contracts worth $500 million were liquidated.

The main reason behind such indifference of traders to expiry of today seems to be the failure over the past few weeks to establish support levels above $11,200.

$157 M BTC Futures Expiry shaken by Bitcoin Price

As Cryptotvnetwork mentioned earlier this week, the current “macro factors hint at a price cycle of positive medium-term to long-term but suggest that in the near term, momentum will fade and a consolidation phase will begin.”

The markets behaved completely different over the last weeks of expiry of each futures contract, hence a different outcome on the liquidated amount. Late July presented a bull run of 26%, whereas the past two weeks have been flat. Some traders may be disappointed by the recent loss of momentum of Bitcoin, but this doesn’t mean that the professional investors just exited the futures markets. The absence of the stability of futures open interest or volume means that bets have already been placed.

bitcoin
Bitcoin
Image Source – Sunday Guardian

Investors should worry only when there is diminishing open interest as this is an indication that the savvy traders have reduced their exposure. This would be especially concerning during the consolidation phases. Such a bearish scenario is not the case, as the total open interest throughout 2020 among all exchanges more than doubled. The current $4.9 billion mark is just $800 million shy of the historical high achieved on August 17.

Regardless of the correlation of 30-day and 90-day, tight intraday moves between Bitcoin and gold sometimes last for a couple of days. This holds especially right when large macroeconomic events like Jackson Hole conference of this week  dominate the scene.

LEAVE A REPLY

Please enter your comment!
Please enter your name here