With Bitcoin retaining its dominance in the broad crypto ecosystem regardless of the market condition, the negative trend facing the market has weighed heavily on the asset, as data from Coinglass shows its open interest turning red.
The crypto market has continued to witness recurring downturns just after its recent bull run that saw Bitcoin achieve a new all-time high on July 13. The switch in market sentiments has seen Bitcoin lead the broad market correction as its price retreats to previous lows.
Nonetheless, the data provided by the source shows that the downturn in Bitcoin price has also extended to its futures market. Open interest in BTC has plunged by 1.32% over the last day, signaling weakened optimism among investors.
Only 142,930 BTC on CME
While the frequent dip in market value has led to a substantial wipeout of open interest in Bitcoin futures, the distressing market conditions suggest that bears might be surfacing.
Notably, the amount of BTC committed in active contracts across all crypto exchanges has reduced to 703,420 BTC, worth about $82.82 billion on July 30.
Out of this, only 142,930 BTC worth about $16.81 billion have been registered on the world’s leading and most diverse derivatives marketplace, CME.
While recent liquidation events have majorly impacted traders that are opening long positions on the leading cryptocurrency, the downturn in open interest implies that traders are exiting their positions either by closing trades on their own will or by being liquidated.
As such, traders are not willing to lose more funds as the market has remained uncertain; hence, they are increasingly closing their contracts.
Notably, the drop in BTC’s open interest comes as no surprise. Amid the broad uncertainty in the global crypto market, all leading altcoins are also seen facing major downturns.
While this suggests that momentum is fading, it also indicates reduced interest in the leading cryptocurrency as bulls might be exiting amid the negative price actions.