venturefounder

BTC Open Interest has finally been reset to the lowest level since the end of Sept 2021, before Uptober, no more greed now. From this, we should expect lesser volatility in the immediate future. ETH, which had run hotter than BTC since Uptober (driven by leverage) has also reset its open interest level to the lowest point since Sept 2021 and Feb 2022. Overall, ETH open interest has dropped by ~50% since ATH levels in early Nov 2021. Given the data from the past few months, it seems certain OI levels tend to be pretty predictive of potential corrections. Whenever OI elevates to these new heights, ETH is at risk of topping and correcting. Less volatility can be expected when Open Interest is low.  

Bitcoin miners are regarded as smart money and speculators in the BTC markets. As BTC price recovers, Bitcoin miners have not shown any trend of net distribution, in fact, the net accumulation trend which started in July 2021 continues.  

Stablecoins on exchanges have gradually gone up in this recent cycle. Even after the recent sell-off in the past 6 months, the stablecoins balance have not gone down (which would indicate redemption from crypto to fiat ecosystem), but instead still trending in the up direction. This is very bullish for crypto as an ecosystem as the money stays within web3 instead of going elsewhere, and also make Buy-the-dip easier as stablecoins can be easily swapped into other crypto like BTC or ETH.  

BTC are taken off from and deposited to exchanges for various reasons. However, most of the time, it can be assumed an increase BTC on exchanges are with intention to sell in the near term, and those BTC taken off from exchanges are with the intention for long-term storage. This month, BTC exchange reserve hit a new low since Sept 2018 (and also a new low in the current cycle). This is regarded as a bullish on-chain signal. For example, in the period of April 2021 to July 2021, BTC exchanges went up and this was accompanies with the bearmarket in summer 2021. In contrast, BTC on exchanges remain flat during the correction which started in Nov 2021, and have gone down again during the double bottom from Jan 24, 2022 to Feb 24, 2022. BTC on-chain demand have come in since March 2022 and continued in April 2022.  

Bitcoin miners are regarded as smart money and speculators in the BTC markets. As BTC price recovers, Bitcoin miners have not shown any trend of net distribution, in fact, the net accumulation trend which started in July 2021 continues.  

Bitcoin Open Interest raised up rapidly from $38k to $46k between March to April 2022. It deleveraged a bit since the sell-off from $46k, however the open interest level is still elevated, and more liquidations on leveraged positions are possible. Caution should be taken here.  

Bitcoin on exchanges hit a new low in March, after hovering at around the same level since Sept 2021. One of the key drivers behind the record new low for Bitcoin on exchanges might be the continuation of Russia and Ukraine conflict, as the BTC adoption continues.  

Bitcoin miners are regarded as smart money and speculators in the BTC markets. As BTC price recovers, Bitcoin miners have not shown any trend of net distribution, in fact, the net accumulation trend which started in July 2021 continues.  

As Bitcoin breaks out higher to above $46k again (bullish), the Bitcoin Open Interest is on the rise again and back up to the levels in the past which large liquidation candles have happened. It is important to take note of this increasing risk and manage leveraged positions with caution.  

With the quick rise from $32k to nearly $45k in BTC price during the month of February, there had been a rise in leverage. This leverage has been completely reset in the past 2 weeks. Once again, BTC is returned to a position where leverage in the market is low enough that a lower volatility shall be expected. That means, much low likelihood for large daily capitulation candles like the ones seen in Sept 2021, Dec 2021, Jan 2022 and to some extent in mid Feb 2022. Slow bleed can still happen, but de-leverage events with large volatility are less likely to occur.