The number of extraordinary futures and perpetual contracts on Bitcoin has risen to a record high. Traders are betting for further price drops in a market that is already bearish. Meanwhile, Bitcoin trading volume is falling on the world’s largest futures exchange CME, according to the latest report from Arcane Research. This shows that institutional investors’ interest in the market has decreased.
Bets bear bearish for Bitcoin as futures hit record highs
cryptocoin.com As we reported, Bitcoin’s (BTC) futures market is now bigger than ever. However, investors seem to be contributing to the bets on a sustained price drop. According to Arcane Research, open interest (OI) in Bitcoin in leading cryptocurrency futures and perpetual transactions hit a new record high of 565,579 BTC ($10.6 billion), surpassing the previous peak of 548,096 BTC reached in February 2020. rose. The data includes positions on traditional commodity exchanges such as the Chicago Mercantile Exchange (CME), as well as crypto exchanges such as Binance and Bybit.
Open interest refers to the number of unpaid contracts. While the increase in open interest indicates the flow of money to the market, it does not provide much information about the market position. For this reason, traders often read open interest in terms of futures and along with other metrics such as funding rates, which represent the cost of holding bull or bear positions. A negative funding rate means that the market is trending towards the moon. Secondly, this seems to be the case with Bitcoin. “At the stock market level, open interest is always net neutral,” said Arcane Research analyst Vetle Lunde. But shorts are definitely offensive,” he says.
BTC futures volumes continue to decline
In the report of Arcane Research, it is noted that the bear trend dominates the institutional futures market. In this context, it is stated that short prices exceed long prices. It is possible to see this situation from the entries and exits of BTC futures ETFs. While e inflows increased in ProShares’ short Bitcoin ETF, there were money outflows from ProShares Bitcoin Strategy ETF.
However, it is underlined that CME’s BTC volume has remained severely low over the past week. In this context, volatility in the market is likely to increase due to low volume. This week in particular, CME Bitcoin trading volume has been recorded as its fourth-worst week since the beginning of last year. Moreover, the trading volume in August also shows that institutional interest in Bitcoin is very low.
Bitcoin short futures listed on major exchanges, including CME and Binance, have been trading at a discount from the spot price since mid-August. This shows bear flows.
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