Bitcoin Futures Open Interest Hit YTD Lows, Market Turns to Stablecoins

In the crypto world, the past few days have seen a series of important developments worth discussing. According to Glassnode data, the total allocation of open futures contracts has reached an all-time low of around 400,000 BTC, which is nearly 250,000 BTC less than in November 2022. This shows that investors tend to move towards stablecoins and the US dollar, with about 70% of allocations in these currencies.


Bitcoin futures open interest | Source: Glassnode


Cryptocurrency Margin Opening Futures Contracts | Source: Glassnode

One notable trend is the decline in crypto backing margins, which are currently at an all-time low with around 30% allocated. This suggests that investors are increasingly taking a risk-free approach to investing in bitcoin and thus may be looking for more stable alternatives. While this may remove some of the volatility associated with bitcoin, it also limits the potential for significant gains.

Understanding Bitcoin’s Recent Price Correction: Two Drivers and a Reason for Cautious Optimism

In related news, data encryption quantization There are two reasons for pointing to the recent Bitcoin price pullback. First, short-term holders take profits when profit margins rise above 5%. This has caused the price to fall as it has risen above reasonable price levels for the 1-3 month age range, which usually indicates short-term price trends and momentum. Second, some miners moved their bitcoins to exchanges in early March.


Short-Term SOPR Holders | Source: CryptoQuant

Despite these developments, on-chain data still points to a cautiously optimistic outlook for Bitcoin for a number of reasons. First, since the end of 2022, spending by large households known as “whales” has been relatively low compared to other price adjustments.

Second, whale holdings soared to their highest level since November 30, 2022 as big players continued to add to their holdings.

Third, the inter-exchange flow pulse (IFP) marks the early stages of a bull market, with momentum returning to positive territory after a positive 7-day percentage change in the indicator.

Finally, the bull/bear cycle indicator remains in bullish territory, and the momentum of the on-chain P&L index has moved into more sustainable levels.

Derivatives traders are also in a positive mood, willing to open new long positions with funding rates above zero. This further supports Bitcoin’s bullish outlook in the weeks and months ahead. While there may be some short-term volatility in the market, these indicators suggest that Bitcoin remains a solid investment for those looking to enter the world of digital currencies.

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according to Kyptos

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