Bitcoin (BTC) and Ethereum (ETH) concluded September with fluctuations, experiencing declines as short-position traders dominated the market, leading to higher long liquidation volumes.
Despite these downturns, the absence of a substantial sell-off signals a positive outlook for the market.
Declines in Open Interest for Bitcoin and Ethereum
Recent data from CryptoQuant shows that Bitcoin and Ethereum witnessed notable reductions in open interest (OI) during the last trading session. BTC’s open interest decreased from $18.6 billion to $18.1 billion, indicating a preference among traders for closing futures positions.
This drop in OI typically signifies reduced liquidity, volatility, and interest in derivatives trading, potentially leading to a long/short squeeze.
Similarly, Ethereum’s open interest also experienced a slight decline, although not as pronounced as Bitcoin’s. Presently, BTC’s open interest has rebounded to $18.3 billion, while ETH’s OI has increased to $9.4 billion, reflecting revived market participation.
Price Movements in Line with Open Interest Trends
The decrease in open interest directly impacted the prices of both Bitcoin and Ethereum. Bitcoin saw a 3.50% drop, declining from $65,600 to $63,301, falling below its 200-day moving average.
Similarly, Ethereum decreased by 2.13%, from $2,657 to $2,601, remaining under its 200-day moving average but still above the 50-day moving average.
At present, both assets have displayed a minor recovery, with Bitcoin trading at $63,789, a 0.7% increase, and Ethereum showing a gain of over 1% at around $2,639.
Stability in Exchange Flows
Despite recent declines, there hasn’t been a significant sell-off. Data indicates that Bitcoin had a negative exchange flow, implying a balanced movement of BTC between exchanges and personal wallets.
On the contrary, Ethereum observed a slight rise in exchange inflows, with 14,000 ETH entering exchanges during the previous trading session.
However, this volume wasn’t substantial enough to trigger a major sell-off. Currently, the flow has reverted to negative, with over 23,000 ETH withdrawn from exchanges, suggesting diminished selling pressure.
Concluding Remarks
Although Bitcoin and Ethereum faced declines towards the end of September, the absence of a significant sell-off and the subsequent price upticks hint at a relatively stable market.
Open interest trends and exchange flows suggest that investors are not hastily exiting their positions, indicating the potential for recovery in the short term.