Today’s Bitcoin Futures (BTC) expiration was lackluster in both price impact and volume. Open interest fell by just $ 157 million to just barely $ 5 billion.
As CoinTelegraph correctly predicted yesterday, this latest CME Bitcoin futures expiration was irrelevant. Some $ 125 million in August contracts were due to be liquidated today, though preliminary data indicates less than $ 40 million has not been carried over for months to come.
Total open interest, million USD. Source: Bybt.com and CoinTelegraph
The chart above shows the total change in open interest over the past 24 hours, although the data includes reverse (perpetual) swaps and remaining calendar months.
Nonetheless, this is quite the opposite of the July expiration, when $ 500 million in futures contracts were liquidated.
Expiration size depends on recent price activity
The main reason for the indifference of these traders at today’s expiration appears to be the failure to establish support levels above $ 11,200 in recent weeks.
As CoinTelegraph mentioned earlier this week, “Current macro factors suggest a positive mid to long term price cycle, but suggest that in the short term momentum will wane and a phase of consolidation will occur.” .
Bitcoin intraday price chart, USD. Source: TradingView
The markets behaved completely differently in the last few weeks of each futures contract expiration, resulting in a different result on how much was liquidated. End of July showed a 26% bull run, while the past two weeks have been stable.
Open interest is more important than small expirations
Some traders may be disappointed with Bitcoin’s recent loss of momentum, but that doesn’t mean professional investors have left the futures markets. The lack of volume or the stability of open term interest means that bets have already been placed.
Investors should only be concerned when open interest decreases, as this indicates that savvy traders have reduced their exposure. This would be particularly worrying during the consolidation phases.
Bitcoin futures aggregate open interest. Source: Skew
Such a bearish scenario is not the case, as the total open interest among all exchanges has more than doubled throughout 2020. The current bar of $ 4.9 billion is barely $ 800 million lower. that the historic peak reached on August 17.
Bitcoin seems strongly correlated to gold and that’s ok
Regardless of the 30-day and 90-day correlations, the tight intraday movements between gold and Bitcoin sometimes last for a few days. This is especially true when big macroeconomic events like this week’s Jackson Hole conference dominate the scene.
BTC / USD, gold price action. Source: TradingView
Please note that the chart above has different scales as the percentage based oscillations vary from asset to asset. Nonetheless, the similarity of intraday movements between gold and Bitcoin is quite impressive.
This short-term correlation should not be taken as a sign that Bitcoin is becoming more of a global reserve asset, but rather as a reminder that the crypto markets are being significantly affected by the same external events that are driving traditional markets.
As for the remaining expirations of the futures markets throughout the year, it is worth keeping a close watch on the base (contango) and the long / short ratio of top traders as both provide valuable insight into sentiment. large investors.
The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You need to do your own research when making a decision.