Bitcoin volatility not shaking investor interest, recent dip sees $500M evaporation without major trend shift

exchange68September 12, 2024

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Quick Take

Bitcoin once again demonstrated its dynamic nature as open interest experienced substantial growth yesterday. This rapid upsurge was followed by a noteworthy contraction as Bitcoin’s value flash crashed by 2%, leading to an approximate evaporation of half a billion dollars in open interest. Contrary to expectation, this drastic dip did not significantly alter the overall open interest trends.

Presently, Bitcoin’s open interest remains within the 1.8%-2% range of the market cap, aligning with the peak of the current channel. Interestingly, over the past six weeks, despite the market’s instability, Bitcoin’s open interest has seen a steady growth of 6%. This suggests that investors maintain a continuous interest in the cryptocurrency despite its turbulent nature.

This cyclical pattern of open interest growth and shrinkage, set against the backdrop of routine market cap fluctuations, underscores the inherent unpredictability of the cryptocurrency market with Bitcoin at its helm.

Open Interest divided by market cap: (Source: Glassnode)

Analyst

James Van Straten

Former Lead Analyst at CryptoSlate

James fervently appreciates data, technology, and trend-spotting. As a tech and liberty maximalist, he hails Bitcoin as the 21st century’s paramount invention.

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