This confirmed that Bitcoin was still experiencing significant demand even as the price continued to slide. But this might not be enough to generate strong bullish momentum. A look at BTC’s performance in the derivatives market may help provide a better understanding of the level of volatility to expect in the next few days.
Bitcoin experienced a sharp drop in open interest in the derivatives market between 14 – 16 December. This was around the same time that the price gave up its weekly gains.The same metric revealed that Bitcoin’s open interest recovered slightly in the last two days, although not with as much enthusiasm as its previous decline. Despite this slight recovery, the Bitcoin funding rate had not recovered yet.
On the plus side, Bitcoin saw a gradual demand recovery from whales. Addresses holding over 1,000 BTC increased slightly in the last 10 days. This might also soften the downside and herd BTC towards a narrow range.Based on the above observations, it is clear that Bitcoin’s volatility was on its way to recovery, and so was
. On the other hand, bullish demand was still low. Sell pressure and low funding rate suggested the potential for an interesting week ahead.Subscribe to get it daily in your inbox.