- 50% of Bitcoin CME open interest is set to expire this Friday.
- CME Bitcoin futures have seen a surge in popularity recently.
Half of all Bitcoin open interest for Bitcoin CME futures and options are due to expire this Friday, according to Skew, a blockchain and cryptocurrency analytics firm.
Open interest is calculated by the total sum of contracts held at the end of the trading day.
For example, if a trader opens 10 Bitcoin futures contracts (contract size = 5 Bitcoin) for $500,000, the open interest for that day will rise to $500,000. However, if the trader decided to close that position and sell 10 contracts, the open interest will decline back to $0. However, the trading volume for that given trade would be $1 million. Thus, open interest serves as an indicator that helps quantify continual institutional market interest.
CME Bitcoin products have seen a surge in popularity recently. CME Bitcoin open interest has recentely reached an all-time high. CME Group Inc. is one of the largest derivatives marketplaces. They launched Bitcoin futures back in 2017. Recently CME Bitcoin products have seen a surge in popularity. According to Skew, the current Bitcoin open interest is approximately $160 million.
Market Sentiment Dies Down
Following the Bitcoin halving, Bitcoin’s price action has remained relatively contained. As discussed by Johnson Xu (Chief Analyst at TokenInsight), the market sentiment has decreased since the halving.
However as the contracts expire, traders may decide to maintain their position by purchasing another contract for the following month. This may result in short-term volatility. Bitcoin is currently trading at the $8800 level.
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