Bitcoin Rises 35% Since August Low, Open Interest Drops 20%
Bitcoin's price has recovered significantly since its August low, rising 35% to reach the $83,000 to $84,000 range in late September. This recovery is accompanied by a decline in derivatives market activity, with open interest dropping nearly 20% from its peak.
The sharp drop in open interest follows a record short liquidation event on August 19, where 85% of all liquidations came from traders betting against Bitcoin. The subsequent decline accelerated, clearing out a significant chunk of leveraged positioning and contributing to the price increase.
According to Glassnode, this rally is driven by spot buying and inflows from Bitcoin ETFs rather than fresh derivatives positioning. US spot Bitcoin ETFs recorded $2.23 billion in inflows during the strongest seven-day period in August.