Bitcoin Has “Room to Fall” Amid Rising Open Interest: CoinGlass
Harvey Hunter is a Junior Content Creator at Cryptonews.com. With a background in Computer Science, IT, and Mathematics, he seamlessly transitioned from tech geek to crypto journalist.
Bitcoin may still have “more room to fall” as open interest has continued to rise amid recent price action, according to crypto analysis platform CoinGlass.
In an August 16th X post, CoinGlass highlighted that the total open interest (OI) for Bitcoin futures, representing the number of contracts that have yet to be settled, reached $29 billion and has been rising throughout the week.
This uptick in OI contrasts with the 5% decline observed from Bitcoin’s spot price over the past two days, a situation the platform described as “a bit unusual,” as the OI has not yet adjusted to reflect the price drop.
“An increase in open interest means that both long and short positions are increasing,” CoinGlass noted. Consequently, this adds more leverage to the market, which can amplify price movements in either direction.
Significantly, a similar setup triggered the dramatic 20% drop in the Bitcoin price on August 5th as leverage was flushed out.
Something CoinGlass highlighted as a case that Bitcoin could see further downside in the near term. The firm commented:
“I think there is room to fall.”
Additionally, CoinGlass data reveals that funding rates are currently negative. Negative funding rates occur when the price of the futures contract is trading below the spot price of the underlying asset.
This situation discourages traders from holding long positions due to the cost of maintaining them while incentivizing short positions, as traders might profit from the negative funding rates.
The end of the week also brings a significant crypto options expiry event,
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