Bitcoin: Traders take an interest in BTC yet again, what now?
- Bitcoin broke free from its recent price range which led to heightened trading activity.
- Changing put to call ratios and increased implied volatility created opportunities and risks for market participants.
Bitcoin [BTC], which languished in the $25,000 to $26,000 range for some time, has finally seen a surge in its price. Along with the surge in price, BTC also observed an uptick in interest from traders.
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High open interest sparks volatility
According to Arkham Intel, in the last 48 hours, the crypto market experienced notable volatility, largely driven by high futures interest. On Binance’s BTC-USDT pair, open interest swung by more than $100 million on multiple occasions, leading to rapid price movements.
Anyone can see some of the largest deposits taking place on-chain, just before this run-up occurred.
The largest Exchange deposit in the last 24 hours took place at 08:41 this morning, sending $65.2M USDT to Binance. pic.twitter.com/mwtQ6f4hjD
— Arkham (@ArkhamIntel) September 19, 2023
Data revealed that futures interest on Binance’s BTC-USDT pair reached an impressive 97.75K BTC ($2.66 billion) recently. However, this changed swiftly when the SEC filed a court document, causing a sudden drop of ~5000 BTC ($135 million) in futures positions.
As BTC’s price started to rise again, open interest began building up. Within a two-hour window, traders opened a net of 3000 BTC ($81 million) worth of futures positions on the Binance BTC-USDT pair. Moreover, a significant exchange deposit of $65.2 million USDT to Binance occurred, potentially indicating increased buying activity.
Such intense activity in open interest and futures positions could significantly affect Bitcoin’s price and overall market sentiment.
The put to call ratio, which increased by 0.5 over the past few weeks, indicated a changing sentiment among traders. A rising ratio could suggest increasing hedging strategies or speculation on a potential price reversal.
Additionally, Bitcoin’s IV also grew. Elevated Bitcoin implied volatility has far-reaching consequences for the cryptocurrency. High IV could impact risk-averse traders negatively. However, traders with more risk appetite may see this as an opportunity for larger gains.
Investors remained starry-eyed
Despite these fluctuations, retail investors seem unfazed. Glassnode data indicated that the number of addresses holding 0.1 coins has reached an all-time high of 4,491,905. This resilience suggested that many retail investors are committed to their long-term positions in Bitcoin.
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Whale interest aligned with sentiment, as the number of addresses holding 10+ coins also reached an all-time high of 157,560. Large whale interest could help BTC’s price surge further.
On the flipside, a high concentration of whale addresses holding BTC would make the network more centralized.