Crypto: Bitcoin Futures Oi Rebounds 13% As Analysts See Cautious Return Of...

Bitcoin futures open interest has begun to recover in January after a sharp Q4 deleveraging, though analysts say the rebound remains modest.

Bitcoin futures open interest (OI) — a measure of derivative market participation — has gained almost 13% from the start of the year, which analysts say could reflect more risk appetite for crypto.

The increase follows a sharp deleveraging phase from October through December, when Bitcoin derivatives exposure fell alongside a broad market correction.

Bitcoin futures OI has fallen 17.5% from 381,000 BTC to 314,000 BTC over the past three months, following a roughly 36% price correction from early October, “reflecting a phase of risk reduction and the unwinding of leveraged positions,” said CryptoQuant analyst “Darkfost” on Monday.

However, a recovery in Bitcoin futures OI could be in motion, said Darkfost. Data from Coinglass shows it gained from an eight-month low of $54 billion on Jan. 1 to more than $61 billion on Jan. 19.

It also hit an eight-week high of $66 billion on Jan. 15.

“At present, open interest is showing signs of a gradual recovery, suggesting a slow return of risk appetite,” said the analyst.

OI refers to the number or notional value of crypto derivatives contracts that remain open and have yet to be settled, or in other words, a measure of how many active bets exist in the market at any given time.

When it is rising, more traders enter leveraged positions, indicating growing confidence and risk-taking, but a falling OI indicates deleveraging as traders reduce exposure and risk.

Zooming out shows that futures OI is still down 33% from its all-time high of $92 billion in early October.

Source: CoinTelegraph