The crypto market is consolidating as open interest remains “through the roof” among short sellers
The cryptocurrency sector appears to have entered calmer waters as most of its biggest assets, including Bitcoin (BTC) and Ethereum (ETH), haven’t seen much price movement in recent weeks, along with the global crypto market cap.
As things stand, the global crypto market capitalization is currently $931.63 billion, registering a 1.23% week-over-week increase but a 4.46% month-over-month decrease, according to data taken by Finbold from CoinMarketCap on 18 October.
Considering the volatility of the market before June 2022, these changes are unimpressive, although crypto trading expert Michaël van de Poppe observed that open interest still “went through the roof,” leading to “a lot of people eagerly shorting the markets.”
In fact, both Bitcoin and Ethereum open interest on the largest crypto exchange Binance have risen, with Ethereum’s increasing by 10% since the end of September 2022, and Bitcoin’s as much as 20% in the same time, as Finbold previously reported.
No drama in market volumes or activity in the chain
It is also worth noting that crypto market volumes are also not registering any dramatic changes, suggesting low interest from both bulls and bears, as observed by BaroVirtualan analyst at the cryptoanalysis platform CryptoQuant.
According to the analyst:
“From approx. On September 9, 2022, it is quite clear that volumes in both the spot crypto market and the derivative crypto market are essentially sideways; there are no pronounced peaks and troughs, as well as strong crosses, indicating that interest from both bulls and bears is low.”
As BaroVirtual added, “these moments are not uncommon to be pivotal in price action.”
Finally, the on-chain activity of the flagship digital asset has been noted as “non-existent,” as metrics tracking its consumption/lifetime are “down to 2010 levels, close to the initial perception of price,” the crypto analytics firm Unfolded tired on 18 October.
Storm on the horizon?
At press time, Bitcoin was trading at $19,537, up 0.90% on the day, as well as 2.49% for the week, while Ethereum was at $1,325, registering gains of 0.39% over the previous 24 hours and 3 .52% compared to the previous week. .
That said, Van de Poppe still believes that the current smooth sailing may just be the calm before the storm, at least as far as Bitcoin is concerned, as the volatility index below 25 has historically meant “a guaranteed recipe for massive volatility.”
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
