Bitcoin Open Interest Drops 14% as Price Slips 5%: When Will the Real Move Happen?

Bitcoin open interest in coin terms has decreased by 13.5% ahead of the upcoming Fed agenda and political vote.

Santiment Intelligence data showed that positioning in the Bitcoin derivatives market shrank before this week’s critical headlines arrived. Open interest in coin terms dropped from the 321,497 BTC level on September 3 to 278,151 BTC on September 11.

This change corresponded to a drop of 43,346 BTC between the two dates, representing a total decrease of 13.5%. During the same period, the Bitcoin price declined by approximately 5%. Santiment noted that the price drop alone does not explain the movement in open interest.

Positions Are 20% Lower Than Before the Rally

According to Santiment’s assessment, positioning in Bitcoin is approximately 20% below the level seen before the mid-August rally. The decline in open interest halted on September 11, with a limited recovery observed in the following two sessions.

The coin-denominated open interest in the chart is calculated by dividing the dollar-denominated open interest by the Bitcoin price. Therefore, the indicator aims to track the total position size in the market, decoupled from price movement.

Santiment pointed out that the de-risking process took place before Tuesday’s vote and Wednesday’s Fed agenda. As stated in the firm’s post, while news headlines are arriving this week, the actual change in positions occurred the previous week.