Bitcoin’s (BTC) sudden $11,500 drop liquidated more than $1.64 billion worth of BTC futures contracts. This massive figure represents 8.5% of the total $19.5 billion in open interest, which coincidentally had just reached its all-time high.
Although these are significant figures, they were proportionally lower than the $1 billion futures liquidation on November 26, 2020. At that time, the 16% correction that followed Bitcoin price testing a $16,300 low reduced the open interest by 17%.
In light of today’s big price move, investors’ positive expectations regarding Bitcoin remain unfazed as both the futures contracts funding rate and the options 25% delta skew are not flashing any red flags.
Open interest dropped by 8%
Bitcoin futures aggregate open interest. Source: Bybt.com
As the chart above shows, negative price swings and reductions in BTC futures open interest does not impact Bitcoin’s long-term growth. Between Jan. 19 and Jan. 23, the indicator fell by 20%, but it only took only two weeks to recover to the $13 billion level.
Open interestTitle: 3 Bitcoin price metrics show bulls were not fazed by today’s $1.6B liquidation
Sourced From: cointelegraph.com/news/3-bitcoin-price-metrics-show-bulls-were-not-fazed-by-today-s-1-6b-liquidation
Published Date: Mon, 22 Feb 2021 18:40:00 +0000