Bitcoin Price Surges as Derivative Open Interest Plunges Nearly 20%
Bitcoin's price has increased by 35% since its August low. At the same time, open interest in derivatives markets measured in BTC has fallen nearly 20%, according to blockchain analytics firm Glassnode.
This divergence indicates that Bitcoin's price has risen even as the number of outstanding derivative positions denominated in BTC has decreased. Glassnode data shows that BTC-denominated open interest has reached its lowest level since March.
The relationship between Bitcoin's price and open interest provides context for the recent market move. As The Block reported on September 29, Bitcoin was trading near $84,000 after reaching as high as $87,000 the previous week. Coin-denominated open interest was almost 20% below its August level.
The decline in open interest does not determine the direction of Bitcoin's next move, but it shows that the recent price recovery has not been accompanied by a comparable increase in BTC-denominated outstanding derivative positions.