Bitcoin and Ethereum Open Interest Divergence
Data reveals a divergence in open interest between Bitcoin and Ethereum, which has historically been bullish for BTC. On-chain analytics firm Santiment reports that BTC open interest has been declining since Monday. Open interest refers to the total value of Bitcoin contracts currently open on futures and options markets. Increasing values indicate more positions being opened, leading to higher volatility. Conversely, decreasing values suggest traders closing positions or facing liquidation, resulting in a calmer market.
Ethereum Open Interest on the Rise
While Bitcoin open interest declines, Ethereum open interest is increasing. This indicates renewed interest in ETH contracts while BTC contracts are being closed. Santiment’s chart shows a similar pattern in the past where Bitcoin prices saw a 4.5% increase following this trend. Although the current scale is smaller, it remains to be seen if Bitcoin will experience a bullish effect this time.
Bitcoin Price Stagnant
Bitcoin’s price has remained stagnant around $28,400 in recent days.
Hot Take: Will Bitcoin Benefit from Open Interest Divergence Again?
The divergence in open interest between Bitcoin and Ethereum has historically had a positive impact on Bitcoin’s price. While BTC open interest declines, ETH open interest rises, suggesting a shift in market sentiment. In the past, this pattern resulted in a 4.5% increase for Bitcoin. Although the current scale of divergence is smaller, there is a possibility of a bullish effect on Bitcoin. Traders and investors will be watching closely to see if history repeats itself and Bitcoin experiences another uplift in price.
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