Spectura

Since Mid-December last year markets tend to bore investors to death with a sideways only price action. But the same thing that many fail to realize is that *SOME* entities slowly accumulating and building up positions since. While funding is still relatively neutral (green) open interest is slowly building on both occasions (blue chart). We can confirm our deduction via the estimated leverage ratio being its ATH levels on the yellow chart and rising ever since. Just to reiterate: this is all WHILE #Bitcoin price is either dropping or in a sideways action (orange colored top chart on both occasions). This is what accumulation looks like.  

Despite increasing more than %5 in the 24 hours, Bitcoin gave half of its earnings back. However Futures side tells us a different story from the Spot demand. When we look at Futures Open Interest, we see a pattern similar to Bitcoin price movement with %5 increasing OI and giving half back in 24 hours. What is interesting this time is that despite all this happening, the Perpetual Futures Funding Rates are on the positive side and constantly increasing with no sign of slowing down.  

Considering increased Open Interest on the Bitcoin market despite the fact that funding rates stay relatively flat indicates that we still have room to grow during these price actions. Of course we need to keep an eye on the options contracts' expiry date but given the fact that we've just entered October and Q4 just yet, it looks like we are in it for a good run.  

Despite the fall, overall market sentiment for Long Term Holders remain intact for now. Due to price drop we saw overall SOPR for Bitcoin network have been reset (Blue). On the other hand when we look deeper into who lost, we see a slight drop into the negative area for the Short Term Holders (Red) cohort. This being neutralized by positive LTH-SOPR (Green), we can clearly see the percent of UTXOs that are at loss (>~18) (Purple) belong to Short Term Holders.  

On September 7th there were cascading long liquidations that pushed the price of Bitcoin more than %8. Estimated leverage ratio dropped from 0.18 to 0.14 and at that time significant amount of Open Interest (around $3.25B) cleared off from the market. Going forward, we definitely need to keep an eye on these metrics (OI+Lev Ratio+Unrealized Profit/Loss) before making a decision.  

After almost about 4 months we are starting to recover from the big May selloff that pushed down Bitcoin almost %50. Open Interest-wise we are seeing the same exact recovery this week and we've now have over $11.5B of Open Interest with a slightly positive funding rate. We still need to keep an eye on Funding Rates because the climb rate of both Price and OI are not in line with Funding Rates. That means the market is still expecting a leg up soon.  

If we take a look at the transfers from Miners to Exchanges, we uncover the lack of sell side pressure coming from the miners. The situation is either: 1) Miners have currently enough funds to sustain for a while given current minimal inflow (to exchanges), OR 2) Miners are counting on future prices to rise hence not selling today. Either way if we combine those options with the neutral funding rates, we currently have little to none sell pressure and/or incentive to sell at the moment.  

More than 222 million dollars worth of stablecoins entered centralized exchanges (positive netflow) yesterday on August 16th at 18:00 UTC. This is typical for whales and/or institutional entities to wait in the shadows to capitalize on local dips.  

The rally which started in the early 2021 days were consistent with both open interest (blue) and the funding rates (7DMA-green), however this time it seems that market is missing something (funding rates are in the neutral territory).