Bitcoin: Despite spot-market bloodbath, BTC’s OI represents a ‘healthy’ picture

New data from intelligence firm CoinGlass showed that >$280 million worth of digital assets liquidation in the last 24 hours. Surprisingly, the star of the show- Ethereum [ETH] led the rally. This further led to the overall market experiencing increased volatility. Despite such scary scenes, there might come a small indication of relief…

Injecting some fluids

Bitcoin [BTC]’s price recovered slowly after it dropped below $19,000 this week for the first time since the June crypto crash. Moving on from the spot market sector, the derivative aspect for BTC witnessed some interesting movements as well.

Herein, Open Interest is one measure that can be used to suggest whether markets are still in frenzy mode. As per Glassnode’s data, a drop here would indicate a healthy will to stay or rather survive in such conditions. This was indeed the same situation.

Bitcoin percentage futures Open Interest (OI) crypto margined on Binance dropped to a “healthy” all-time-low of 13%.

Source: Glassnode

The said drop recorded a 42% drop from the ATH of 55%, recorded during the May 2021 top. This was recorded during a period of “peak exuberance and speculation”. This signified that a flush-out that was completed, those over-leveraged longs have been liquidated, and markets could settle.

Herein, volatility could likely subside as more mainstream money flowed into the market. Ergo, less volatility around sell-offs.

To support this narrative, Bitcoin’s accumulation didn’t deter as well. Hence, this offered the right support at a difficult time such as this. A crypto analyst called ‘Crypto Rover’ also shared a Glassnode chart that shed some light on this matter.

#Bitcoin Accumulation is not stopping.

Zoom out once in doubt. pic.twitter.com/UXkMTJSzz7

— Crypto Rover (@rovercrc) September 16, 2022

Any concerns?

Indeed one. Bitcoin Miners continued their exodus. According to the report from CryptoCompare’s Asset latest edition, April was the only month where BTC miners profited this year.

The report also noted that miners sold through August to offset operational costs. It indicated that the net outflows from the miners had reached 21.3k BTC.

Again, it won’t be the first time that miners sold their BTC holdings to make ends meet.