Volatility Spikes as Bitcoin Rally Continues: Open Interest Hits Two-Month Low

According to CoinDesk data, while Bitcoin stabilized around $78,000, its approximately 24% weekly gain was seen to be supported by spot buying; volatility increased, while gains in altcoins remained selective.

Bitcoin traded around $77,800 on Monday morning. Gold also rose 0.8% during the same hours, hovering near record levels. Bitcoin’s move, starting from below $63,000, delivered its strongest weekly performance since March 2023. As the price settles, the structure of the rally is being monitored.

Futures provided a significant clue to this picture. Bitcoin futures open interest fell from 762,000 BTC to 715,000 BTC on August 18, reaching a two-month low. Open interest also decreased in Ethereum, Solana, and XRP as prices rose. This indicated that the move was driven more by spot buying and the closing of short positions rather than new leveraged bets.

Bitcoin rally supported by spot buying

Annualized funding rates for major assets remained around 10%. This rate, which reflects the cost of maintaining leveraged positions, showed that bullish bets exist but there is no overheating. BVIV, which measures Bitcoin’s 30-day implied volatility, rose from 36% to 47%. This jump increased expectations for sharp fluctuations.

The call-put skew, showing the relative price of short-term call options on Deribit, turned positive. However, the most active contract was the $70,000 put option. Therefore, the outlook remained cautiously optimistic. No broad rotation was seen in altcoins: Bitcoin’s market dominance stayed at 59.2%, and the Altcoin Season index remained at 42/100.

Gains were concentrated in selected assets. Zcash (ZEC) open interest rose from 1.81 million to 2.24 million tokens, while its price increased by more than 70%. CVD, indicating aggressive buying in ZEC, reached the strongest positive level among major assets. Hyperliquid (HYPE) rose 28% weekly, and Aave (AAVE) rose 62%.