Bitcoin Risk Appetite Fading, Finds Glassnode Report

A new Glassnode report has revealed that the Bitcoin Open Interest continues to decline, a sign demand from risk-taking futures cohorts is waning.

Bitcoin Futures Open Interest Has Shown No Signs Of Growth Recently

In its latest weekly report, on-chain analytics firm Glassnode has talked about the latest trend in the Bitcoin Open Interest. This indicator measures the total amount of BTC-related perpetual futures positions that are currently active on the various centralized derivatives exchanges.

When the value of this metric rises, it means investors are opening up fresh positions on the market. Generally, the amount of leverage present in the sector goes up when new positions appear, so this kind of trend can lead to more volatility for the asset.

On the other hand, the indicator registering a drop suggests positions in the market are going down, either due to investors pulling back on risk, or exchanges enforcing forceful liquidations. Either way, the reduced leverage can result in the coin acting in a more stable manner.

Now, here is a chart that shows the trend in the Bitcoin Open Interest over the past year:

As displayed in the above graph, the Bitcoin Open Interest witnessed a huge plunge last month as the cryptocurrency’s price crash triggered a massive liquidation squeeze. Since then, the metric has continued to slide down as the BTC price has plummeted further.

The fact that the downtrend in the indicator has maintained implies that investors haven’t been opening new positions in place of the ones getting liquidated. “This absence of incremental leverage underscores a cautious stance among market participants and aligns with the broader theme of fading demand across risk-taking cohorts,” explained the report.

Bitcoin has faced another bearish blow in the past day, which has only unleashed a new wave of liquidations in the futures market. As the below table from CoinGlass shows, the cryptocurrency sector as a whole has observed $904 million in liquidations over the last 24 hours.

Prices across the market have dropped inside this window, so it makes sense that $690 million of these liquidations have come from the long contract holders alone.

In terms of the individual assets, Bitcoin and Ethereum have contributed the most toward the squeeze like usual, with $370 million and $235 million in contracts involved, respectively.

Solana has been the leader among the rest with $37 million in liquidations. Interestingly, while most of the market has dropped, SOL is among the few that still have a slight positive gain for the past day.

BTC Price

Bitcoin has returned to the $86,900 level following its latest drop.