Bitcoin Open Interest Declines, Lowest Since Terra Collapse

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Bitcoin Open Interest Declines, Lowest Since Terra Collapse
  • Kaiko reported that Bitcoin Open Interest has declined to its lowest since Terra Collapse.
  • The firm said the decline started in August after Bitcoin recorded a steep decline.
  • Long-term Bitcoin holders continue to accumulate more tokens despite the market downturn.

Blockchain analytical firm Kaiko reported that Bitcoin Open Interest has declined to levels last seen during the Terra-Luna collapse in May last year. Kaiko says the decline started on August 17 after the largest cryptocurrency in the world had one of its worst sell-offs yet.

The report has raised fears of a steeper decline in Bitcoin’s price. The initial sell-off began earlier in August after rumors surfaced that SpaceX had sold its Bitcoin holdings. What came after was a market reaction that worsened an already prolonged market slowdown.

Meanwhile, CryptoQuant recently reported that Bitcoin’s trading volume hit its lowest level in almost five years this month. Following multiple downturns, investors are weary of crypto stocks and are waiting for reasons to jump back into the market.

While the market slowdown has influenced investor’s decisions, the regulatory clampdown on crypto institutions in many countries has also contributed to the foul mood around cryptocurrencies. Notably, the U.S. Securities and Exchange Commission has instituted actions against crypto giants like Binance, Coinbase, and Ripple.

Elsewhere, a report covered that long-term Bitcoin holders have taken advantage of the price drop to accumulate more tokens. Furthermore, the majority of the holders hold onto their spot positions instead of trading or using the tokens as loan collateral.

Long-term holders, it seems, remain unfazed despite the tumultuous state of the crypto market. It also shows that many holders believe more in the longer-term potential of the token.

Data from CoinMarketCap shows that Bitcoin is trading at $26,008 apiece. The current price is a 0.38% decline in the past 24 hours. Price chart data also indicates that the token’s price has seen a marginal decrease in the past week.

In terms of trade volume, Bitcoin has seen a 5% uptick in the past 24 hours after recording over $10 billion. The token currently has a total market cap of $506 billion.