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Bitcoin Metrics Show Significant Decline in Spot Market Price and Futures Open Interest

Bitcoin Metrics Show Significant Decline in Spot Market Price and Futures Open Interest
Bitcoin Metrics Show Significant Decline in Spot Market Price and Futures Open Interest

Coinglass data reveals a significant decline in Bitcoin (BTC) metrics, with a 14% drop in its spot market price and an 18% reduction in the notional open interest (OI) in Bitcoin futures, falling from $37 billion to $30 billion within a month.

Despite the price dip, open interest in BTC-related terms has remained stable with positive funding rates, indicating a renewed demand for long positions. This trend suggests that some traders are entering new long trades, which is a positive sign amidst the price decline.

Over the past four weeks, BTC’s open interest has consistently stayed above the 500,000 BTC mark, according to Coinglass. Open interest represents the number of active or open contracts for an asset at a given time, and notional open interest is calculated by multiplying the number of units in a contract by the current spot market price.

Therefore, the ongoing downtrend in BTC’s price directly impacts the notional open interest, explaining its current decline.

Bitcoin Metrics Show Significant Decline in Spot Market Price and Futures Open Interest

Bitcoin Metrics Show Significant Decline in Spot Market Price and Futures Open Interest

Financial service provider QCP Capital has analyzed the factors contributing to Bitcoin’s recent downturn. They noted heavy selling pressure from sources such as Mt. Gox repayments, miners’ BTC sales, government sales, and other economic data.

Historically, miners’ capitulation has been associated with a cycle bottom for Bitcoin prices. Despite the selling pressure, the options market remains positive, with interest shifting towards Ethereum call options, suggesting a potential robust rebound for Ethereum.

Analytical platform WhaleWire shares a similar sentiment, highlighting the impact of Mt. Gox repayments and Germany’s sale of $3.5 billion worth of seized Bitcoin as significant liquidation events. Social media data from Santiment indicates high levels of fear, uncertainty, and doubt (FUD) among investors, with more mentions of “sell” than “buy” in recent crypto forums.

Despite the prevailing negative sentiment, Santiment believes that some traders might capitalize on the current frustration to buy more BTC, predicting an increase in Spot ETF trading volume post-July 4.

As of the latest update, Bitcoin is trading around $55,705, marking a 3.0% decline and a 21.2% loss over the past 30 days. The current price represents its lowest since February, sitting 24.8% below its all-time high of $73,737 reached in March. Given the current market conditions, BTC is expected to remain within the $50,000-$55,000 price range in the near term.

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