Bitcoin Falls as This Altcoin Rises 6%: Futures Open Interest Hits a Multi-Month High!
Litecoin rose 6% while Bitcoin and many other major cryptocurrencies declined; open interest in futures reached its highest level since January.
According to data reported by CoinDesk, Litecoin (LTC) gained 6.2% over the past 24 hours, trading at $66.89. During the same period, Bitcoin fell 3%. Litecoin’s gain since the start of the UTC day was 8.1%; this covers a different time period than its 24-hour return.
New positions accompany the rally
Open interest in Litecoin futures reached 8.96 million LTC, its highest level since January 18. This extended the increase that has been underway since September 19. Open interest refers to futures contracts that have not yet been closed.
Because the measure is denominated in LTC rather than dollars, the increase is not solely due to the dollar value of existing contracts growing as the price rises. CoinDesk viewed the simultaneous increase in price and open interest as a sign that the rally is being supported not only by short covering but also by new long interest. This data alone does not show the direction of every position opened.
Why is the picture different for Bitcoin?
In Bitcoin futures, dollar-denominated open interest fell 6% over 24 hours while the price declined 3%. The fact that open interest fell more than the price indicates that existing contracts did not merely lose value; some were also closed. CoinDesk found this picture more consistent with long positions being unwound than with new short positions accumulating.
Across the crypto derivatives market, 24-hour taker volume rose 10% to $250 billion, while open interest fell about 6% to $149 billion. Sellers accounted for more than 52% of these trades, which are matched instantly against existing orders. The decline in open interest despite higher volume suggests that not all of the selling consisted of new bearish positions.
As Litecoin diverged during this period, rising U.S. Treasury yields continued to weigh on the crypto market. However, Litecoin was not the only asset to rise: CoinDesk reported gains of 7.6% for Ethereum Classic and 4.1% for Morpho since the start of the UTC day. Returns over different time periods in the article should not be confused with one another.