CME Bitcoin Cash and Uniswap futures began trading on October 19, but the two altcoins lost 20% and 30% from the announcement to the pre-launch period, while the increase in open interest for Bitcoin Cash also largely reversed.
Santiment data show that the momentum following the announcement of new futures contracts for Bitcoin Cash (BCH) and Uniswap (UNI) could not be sustained until launch. The amount of open interest in BCH, which surged on the day of the announcement, approached its pre-announcement level before the first CME contract began trading.
Rose 29% on announcement day, then pulled back
BCH rose about 29% on September 22, when CME announced the listings. The dollar value of open interest, which represents contracts in the futures market that have not yet been closed, nearly doubled to $295.3 million.
However, at the close on October 18, open interest denominated in coins stood at about 560,000 BCH. That amount was less than 1% different from its September 21 level, the day before the announcement. As a result, the increase in positioning following the announcement had largely returned to its starting point by the time the contracts launched.
Losses were steeper than Bitcoin’s
Between September 22 and October 18, BCH fell about 20%, while UNI dropped about 30%. Bitcoin lost less than 5% over the same period. The two altcoins significantly underperformed Bitcoin while awaiting the launch of futures trading.
Balances on exchanges also remained high for UNI. As of October 18, exchanges held about 8.2 million more UNI than they did on September 17. The total balance was less than 2% below its October 8 peak.
The key difference shown by the data is that the launch of new futures products and the increase in positioning during the announcement did not move in the same direction. BCH contracts began trading with open interest close to its pre-announcement level.
Not investment advice.